Kinder Morgan deal suggests more M&A

Kinder Morgan's massive deal

Kinder Morgan announced the biggest energy deal in roughly 15 years, as the largest pipeline in North America plans to buy its subsidiaries for $44 billion in cash and stock, as well as $27 billion in debt.

More mergers and acquisitions could be on the way, too, Richard Kinder, CEO of Kinder Morgan, told CNBC on Monday.

"We think this is a recipe for us being able to do lots of capital projects and lots of potential acquisitions that we simply couldn't do under the old structure," Kinder said on "Squawk on the Street."

As part of the deal, the top U.S. pipeline will bring Kinder Morgan Energy Partners, El Paso Pipeline Partners and Kinder Morgan Management together under one roof. By combining the companies, Kinder Morgan will "dramatically reduce the cost of capital," enjoy "modest savings" and issue less equity because of its lower yield structure, Kinder said. All together, the move will total roughly $20 billion in cash tax savings over the next 14 years, he added.

Richard D. Kinder
Richard Carson | Reuters

The entire transaction is valued at $70 billion, making it the second-largest energy deal in history. Exxon's $74.5 billion purchase of Mobil in 1999, creating Exxon Mobil, was the biggest.

To Kinder, the deal allows Kinder Morgan to tap into what he called the "energy renaissance" in the United States.

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"We just think this is a very fertile field to be plowing today," Kinder said. "Putting everything together [with] KMI is really positive and allowing us, we think, to make bigger inroads into this very important area."

—By CNBC's Drew Sandholm. CNBC's Sally Shin contributed to this report.