Southern Union Co. (SUG) shareholders on Friday approved the company's buyout by rival pipeline company Energy Transfer Equity L.P. (ETE), officially ending a long-running takeover saga.

Shareholders representing about 80% of Southern Union's outstanding shares voted Friday; 98% of the shares were voted in favor of the $5.7 billion acquisition.

The companies said the purchase is set to close in the first quarter of 2012, pending regulatory approval. After the merger is completed, Energy Transfer Equity will become one of the largest transporters of natural gas in the U.S.

Energy Transfer's initial bid for Southern Union in July was followed by a competing offer by Williams Cos. (WMB), resulting in a bidding war that eventually fizzled out in Energy Transfer's favor. Energy Transfer Chief Executive Kelcy Warren said in an interview that even though the transaction turned "into more of an auction than we hoped," his company is "very pleased" at the result of the negotiations. "We feel that Southern Union shareholders have received top dollar for their company," he said.

Southern Union CEO George Lindemann said "the transaction creates compelling opportunities for both Southern Union and Energy Transfer. It is the right next step for Southern Union and delivers significant value for our shareholders."

The purchase of Southern Union comes during a major restructuring of the natural-gas-and-oil-transportation business in the U.S., prompted by an onslaught of new production from shale oil and gas fields, and the growth of new urban markets for natural gas in southern states. The shift recently spurred another mega-deal in the pipeline business--Kinder Morgan Inc. (KMI)'s $21.1 billion acquisition of El Paso Corp. (EP), set to close in the second quarter of 2012.

-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214;angel.gonzalez@dowjones.com

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