Case | HBS Case Collection | July 2012

El Paso's Sale to Kinder Morgan

by John Coates, Clayton Rose and David Lane

Abstract

On October 16, 2011, El Paso agreed to sell itself to Kinder Morgan for just over $21 billion. Shareholders filed suit, arguing that the process was tainted by conflict and that a higher price could be obtained. Delaware Chancellor Leo Strine agreed with the plaintiffs on the conflicts, and in his opinion expressed serious concerns with how El Paso advisor Goldman Sachs and El Paso CEO Douglas Foshee conducted themselves in the process. The case examines these conflicts, Strine's view of their effects on the outcome, and the reason he was unable to grant the plaintiff's request, instead allowing the merger vote to proceed. The case is a companion case to "Barclays Capital and the Sale of Del Monte Foods," HBS 313-020.

Keywords: El Paso; Kinder Morgan; Goldman Sachs; Leo Strine; conflicts of interest; corporate governance; Corporate Governance; Relationships; Lawsuits and Litigation; Energy Industry; Banking Industry; United States;

Citation:

Coates, John, Clayton Rose, and David Lane. "El Paso's Sale to Kinder Morgan." Harvard Business School Case 313-021, July 2012.