Proven Reserves stalwart Enterprise Products Partners LP (NYSE: EPD) has agreed to acquire fellow Portfolio holding Duncan Energy Partners LP (NYSE: DEP) in a $2.4 billion all-unit deal. Under the terms of the deal, unitholders will receive 0.95 units of Enterprise Products Partners for each unit of Duncan Energy Partners–roughly a 30 percent premium to the stock’s close on Feb. 22, 2011.

This deal makes a lot of sense for both master limited partnerships (MLP). In 2007 Enterprise Products Partners partially spun off Duncan Energy Partners to raise cash. We added Duncan Energy Partners to the model Portfolio, projecting that drop-down transactions from its general partner would fuel solid distribution growth.

This investment thesis paid off: Over the past three years, Duncan increased its distributions at an annualized rate of more than 7 percent, while Enterprise Products Partners increased its payout an average of 6 percent per annum. We stuck with Duncan Energy Partners through the 2008 collapse because of our trust in Dan Duncan and the rest of the management team.

Enterprise Products Partners already owns nearly 60 percent of Duncan Energy Partners and controls the MLP’s general partner. Given the close ties between the two MLPs, integration risk is minimal.

Investors could continue to hold Duncan Energy Partners through the acquisition process to obtain units of Enterprise Products Partners, one of our favorite MLPs. But many subscribers already own stakes in both firms. Sell Duncan Energy Partners LP and book a nearly 160 percent gain from our original recommendation in 2007.   

That 160 percent gain represents more than twice the total return of the industry benchmark Alerian MLP Index over the same time frame.

When a company makes a big acquisition, its stock often sells off. Units of Enterprise Products Partners are trading slightly lower in the wake of this deal. Investors should regard any weakness in the stock as a buying opportunity. Buy Enterprise Products Partners LP up to 45.