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Natural gas pipeline operator Regency Energy Partners L.P. will pay $5.6 billion to pick up rival PVR Partners L.P. The purchase includes the assumption of net debt of $1.8 billion.

The acquisition will give Regency Energy a strategic presence in two producing areas, the Marcellus and Utica shales in the Appalachian Basin as well as the Granite Wash in the Mid-Continent region.

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The two companies noted the deal will create a leading gas gathering and processing platform with a scaled presence across North America’s high-growth unconventional oil and gas plays in Appalachia, West Texas, South Texas, the Mid-Continent and North Louisiana.

The boards of directors of both companies approved the deal that will be a unit-for-unit transaction plus a one-time cash payment to PVR unitholders. The transaction is subject to approval by PVR’s unitholders.

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Following the closing, the combined company will retain the name as Regency, with its headquarters in Dallas. Michael Bradley will continue as president and chief executive of the combined company, while Thomas Long will continue as executive vice president and chief financial officer.

“We expect the increased footprint and scale to create significant synergies and provide substantial organic growth opportunities that will continue to support our goal of increasing distributions and creating unitholder value,” said Bradley, current president and chief executive of Regency Energy.

In late February, Regency Energy agreed to buy Southern Union Gathering Co. LLC, the owner of Southern Union Gas Services Ltd. or SUGS, from Southern Union Co. for $1.5 billion. At that time, the company said the acquisition will significantly expand its presence in the Permian Basin, one of the most productive oil and liquids-rich basins in North America.

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