The companies say the deal will create the largest midstream and the fourth-largest energy company in North America.

"This once in a lifetime transaction is a win-win opportunity for both companies," said Kinder Morgan chairman and CEO Richard D. Kinder. "The El Paso assets are primarily regulated interstate natural gas pipelines that produce substantial, stable cash flow and have access to key supply regions and major consuming markets."

The price works out to $26.87 per share, which the companies say represents a 47% premium to the 20-day average closing price of El Paso shares and a 37% premium over their Friday close of $19.59.

Evercore Partners and Barclays Capital advised Kinder Morgan. A Weil Gotshal Manges LLP team led by Thomas Roberts and including R. Jay Tabor, Steven Newborn, Marc Silberberg, Jared Rusman, Andrew Gaines, Mary Korby, P.J. Himelfarb, Annemargaret Connolly and Michael Epstein along with Bracewell Giuliani LLP counseled the buyer.

The target turned to Morgan Stanley and Goldman, Sachs & Co. for financial advice and Wachtell, Lipton, Rosen & Katz LLP for legal counsel.