Growth Portfolio holding Energy Transfer Partners LP (NYSE: ETP) announced a deal to acquire Sunoco (NYSE: SUN) in a cash and stock deal worth about $5.3 billion. Sunoco’s stockholders will receive $25 and 0.5245 units of Energy Transfer Partners for each share. These terms amount to $50.75 for each share of Sunoco, a premium of roughly 23 percent to the stock’s most recent closing price.

Sunoco last year moved to exit its legacy refining operations on the East Coast, shuttering a Pennsylvania facility capable of processing 175,000 barrels per day and entering negotiations to shift operation of another refinery in Philadelphia to the Carlyle Group. If this joint venture falls through, Sunoco would idle this facility by August 2012.

Energy Transfer Partners targeted Sunoco for its extensive portfolio of midstream assets, which includes 2,500 miles of refined-product pipelines, 5,400 miles of oil pipelines and terminals capable of holding 42 million barrels.

The master limited partnership (MLP) currently owns 21,500 miles of natural gas pipelines, 1,500 miles pipes that transport natural gas liquids (NGL) and significant gas processing and treating capacity. After the acquisition closes, Energy Transfer Partners’ throughput mix would shift from 86 percent natural gas to 55 percent natural gas, 10 percent NGLs, 27 percent crude oil and 8 percent refined products.

Conservative Portfolio holding Enterprise Products Partners LP (NYSE: EPD) continues to reap the rewards after acquiring similar assets from Teppco Partners LP, largely because of organic expansion projects.

Sunoco has exposure to the majority of its midstream assets through its 32.4 percent stake in Conservative Portfolio holding Sunoco Logistics Partners LP (NYSE: SXL) and control over the MLP’s general partner. Sunoco in 2011 received $97 million in pretax distributions from Sunoco Logistics Partners, up from $91 million in 2010. We expect this growth to continue in coming years.

We regard the deal as a neutral or a modest positive for Sunoco Logistics Partners, which continue to trade as a separate entity and won’t impact Sunoco Logistics Partners’ cash flow. Over the long term, Energy Transfer Partners will seek to expand its exposure oil and refined products midstream assets both through organic growth projects and acquisitions–likely by Sunoco Logistics Partners.

Buy Energy Transfer Partners LP under 50 and Sunoco Logistics Partners LP when the stock dips to less than 32.