ONEOK to move into oil transportation in $18 billion acquisition of Magellan Midstream

ONEOK announced a more than $18 billion deal to acquire Tulsa-based Magellan Midstream Partners, L.P. Magellan will be merged into a newly created 100% wholly-owned subsidiary of ONEOK and allows for the firm to move from its natural gas focused into transporting refined products and oil.

In the merger agreement, valued at $18.8 billion, ONEOK is acquiring all of the outstanding units of Magellan. It is a cash-and-stock transaction in which Magellan’s debt is also part of the deal. ONEOK has historically transported natural gas liquids and natural gas but the access to Magellan’s operations will give the combined company 44% in NGLs and 21% in refined products.

Oil & Gas Permits

ONEOK & Magellan Texas Pipeline Permits

The announcement said it will result in a combined company with a total enterprise value of $60 billion. The consideration will consist of $25 cash and 0.6670 shares of ONEOK common stock for each outstanding Magellan common unit. It means the implied value to each Magellan unitholder will amount to $67.50 a unit for a 22% premium.

Energy News

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