ONEOK is acquiring Magellan Midstream Partners in a cash-and-stock transaction valued at approximately $18.8 billion, creating a US oil and gas pipeline giant.
ONEOK, a publicly traded energy company based in Tulsa, has made significant acquisitions and expansions to strengthen its position in the energy infrastructure sector. The acquisition of Magellan Midstream Partners reflects ONEOK's strategic growth initiatives in expanding its pipeline network and becoming a major player in the oil and gas pipeline industry.
“The combination of ONEOK and Magellan will create a diversified North American midstream infrastructure company with predominately fee-based earnings, a strong balance sheet and significant financial flexibility focused on delivering essential energy products and services to our customers and continued strong returns to investors," said ONEOK CEO Pierce Norton in a statement.
Under the terms of the transaction, Magellan will become a 100% wholly-owned subsidiary of ONEOK.
ONEOK operates a vast network of pipelines and facilities that span several states. The company's infrastructure includes natural gas gathering and processing facilities, as well as pipelines and storage facilities for both natural gas and natural gas liquids.
Consideration will be $25 in cash and 0.6670 shares of ONEOK stock per unit of Magellan, representing a 22% premium to Magellan’s closing price on May 12, 2023.
Having been unanimously approved by the board of directors of both companies, the acquisition is expected to close in the third quarter of 2023.
ONEOK shares fell 6.2% to US$59.77 on the news, while Magellan added 15.7% at US$64.08.
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