ONEOK To Acquire Magellan Midstream Partners In $18.8 Bln Deal

(RTTNews) - ONEOK Inc. (OKE) agreed to acquire all outstanding units of Magellan Midstream Partners L.P. (MMP) in a cash-and-stock transaction valued at about $18.8 billion including assumed debt.

Each Magellan unitholder will receive $25.00 in cash and 0.6670 shares of ONEOK stock per unit. This represents a current implied value to each Magellan unitholder of $67.50 per unit, for a 22% premium, based on May 12, 2023 closing prices.

The transaction is expected to be earnings per share accretive beginning in 2024 with earnings per share accretion of 3% to 7% per year from 2025 through 2027, and free cash flow per share accretion averaging more than 20% from 2024 through 2027. Base forecasted synergies are expected to total at least $200 million annually.

The combined company will own more than 25,000 miles of liquids-oriented pipelines, with significant assets and operational expertise at the Gulf Coast and Mid-Continent market hubs.

The transaction is expected to close in the third quarter of 2023.

Following the close of the transaction, Pierce H. Norton II, ONEOK president and chief executive officer, will continue to serve as chief executive officer of the combined company. ONEOK intends to seek and nominate one or two director(s) serving on the board of Magellan's general partner.