Under the terms the merger deal, worth $5.3 billion, Sunoco will continue its plan to exit the refining business, including pressing ahead on the proposed joint venture being discussed with The Carlyle Group regarding the 330,000-b/d refinery in Philadelphia.

By acquiring the petroleum logistics and fuel retailing company, ETP will also own Sunoco’s general partner interest and the incentive distribution rights in Sunoco Logistics Partners as well as Sunoco’s 32.4% interest in Sunoco Logistics’ limited partner units and Sunoco’s  branded retail business.

Sunoco’s logistics and retail businesses will maintain their headquarters in the Philadelphia area.

“Our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products,” ETP Chairman and CEO Kelcy Warren said in a statement.

The deal will take the combined company’s cash flow mix related to the pipeline businesses to approximately 70% natural gas and 30% heavier hydrocarbons, Warren said, adding that the scale of the ETP platform will grow from the creation of new service capabilities and the move into new geographic operating areas.

The unit and cash deal is valued at $50.13 per share, a transaction that will “enable Sunoco’s businesses to realize their full potential by becoming an important part of a diversified leader in the energy industry,” Brian MacDonald, Sunoco president and CEO said in the statement, delivering both an attractive premium to shareholders and the chance to participate in the future growth of the business.

“ETP has an interest in growing its Marcellus Shale-related activity, and I am pleased that the combined enterprise will retain a strong Pennsylvania presence,” MacDonald added.

The boards of both companies have approved the deal and it is expected to close in the third or fourth quarter of 2012. After the closing Sunoco and Sunoco Logistics Partners will operate under the Energy Transfer Equity, L.P. umbrella of companies. Sunoco Logistics will continue to be traded on the New York Stock Exchange as a separate publicly traded master limited partnership (MLP).

Energy Transfer Partners LP has pipeline operations in Alabama, Arizona, Arkansas, Colorado, Florida, Louisiana, Mississippi, New Mexico, Utah and West Virginia. It owns the largest intrastate pipeline system in Texas. Its natural gas operations include 23,500 miles of gathering and transportation pipelines, treating and processing assets and three storage facilities in Texas. ETP also holds a 70% interest in Lone Star NGL, an NGL joint venture that has storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. ETP’s general partner is owned by Energy Transfer Equity LP, a family of companies that owns approximately 45,000 miles of natural gas and NGL pipelines.

Sunoco, Inc. owns the general partner interest of Sunoco Logistics Partners LP, a network of approximately 4,900 fuel retail locations in 23 states and two oil refineries. The Philadelphia refinery is the last of five Sunoco plants still operating following two sales (Tulsa and Toledo) and two shutdowns (Eagle Point and Marcus Hook) in the last few years.

Sunoco Logistics is an MLP that owns and operates complementary pipeline, terminaling, crude oil acquisition and marketing assets. Included is 2,500 miles of refined product pipelines in the U.S. Northeast, Southeast and Midwest and equity interests in four refined product pipelines. The crude oil segment has 5,400 miles of pipelines, located mostly in Oklahoma and Texas. Terminal facilities consist of 42 million shell barrels of refined product and crude oil capacity (including 22 million barrels of capacity at Nederland in Texas and 5 million barrels at Eagle Point in New Jersey). Crude oil acquisition and marketing is principally conducted in Oklahoma and Texas and consists of 190 crude oil transport trucks and 120 crude oil truck unloading facilities.