Penn Virginia Resource Partners LP on Tuesday agreed to buy general partner Penn Virginia GP Holdings LP in a stock transaction valued at about $954.5 million.

Radnor, PA-based Penn Virginia Resource, a master limited partnership (MLP), manages natural gas gathering and processing businesses. Penn Virginia GP is controlled by onshore producer Penn Virginia Corp., which owns a 37.6% stake and all of the incentive distribution rights.

The combination follows one announced earlier this month by Enterprise Products Partners LP, which is combining its holding companies (see Daily GPI, Sept. 8). In June Buckeye Partners LP and Buckeye GP Holdings LP agreed to merge, and in August Inergy LP and Inergy Holdings LP said they would combine their partnerships.

The transaction would cancel Penn Virginia GP's incentive distribution rights (IDR), which gave it an increasing share of the distributable cash flow that it generated. By canceling the IDRs companies may be able to generate more funds to expand.

William Shea, who is CEO of both Penn Virginia Resources and Penn Virginia GP, said once the transaction is completed the combined MLP would seek acquisitions and increase its quarterly distribution.

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