The deal is the latest in a string of multibillion dollar mergers in the midstream energy storage and pipeline sector.
Shares of Sunoco were down more than 5 percent Monday afternoon, while ETP's stock was down more than 8 percent.
The merger will primarily address Energy Transfer's near-term coverage issues and create operational and administrative savings, said Jay Hatfield, a portfolio manager at InfraCap.
He said proposals by President-elect Donald Trump could provide some additional upside for the deal if he allows the Dakota Access Pipeline project to move forward.
The project has been held up from months as opposition from the Standing Rock Sioux tribe over the pipeline's path beneath its grounds has grown into a larger protest among activists, who have occupied land near the proposed construction site. Late Sunday, law enforcers and protesters clashed, injuring more than 150 people as tear gas, freezing cold water and rubber bullets were used to disperse what authorities said was an aggressive a crowd.
In his election campaign, Trump vowed to roll back regulations and unleash "a treasure trove of untapped energy" in the United States. In August, Trump said lifting restrictions on oil and gas would increase gross domestic product by more than $127 billion and add about 500,000 jobs, though some economists question those claims.
Discussing the deal on CNBC's "Squawk on the Street," Jim Cramer said the merger was the first "Trump deal" in the energy sector.
"Pipelines are going to be winners under Trump," Cramer said. "Energy Transfer's been trying to build that national network of natural gas. This is a very important deal and it's out of nowhere, and this group is finally going to break out."
But CNBC colleague David Faber said it doesn't appear to be based on anticipated moves by the Trump administration.
"It is more about the ability of ETE, Energy Transfer, to pay a dividend to its holders," Faber said.