ONEOK to buy Magellan Midstream Partners for US$18.8 billion
Published by Elizabeth Corner,
Senior Editor
World Pipelines,
ONEOK Inc. agreed on Sunday to buy US pipeline operator Magellan Midstream Partners in a cash-and-stock deal valued at about US$18.8 billion including debt, bringing natural gas-focused ONEOK into transporting refined products and oil, reports Reuters.
ONEOK will pay US$25 and 0.6670 shares of ONEOK common stock for each outstanding Magellan common unit, representing a premium of 22% based on Magellan shares' closing price on 12 May. The buyer will also assume Magellan's US$5 billion debt pile.
The deal will give ONEOK, until now a transporter of natural gas liquids and natural gas, access to Magellan's refined products and crude oil transportation business. The combined company will have 44% of its business in NGLs, and 21% in refined products, according to a presentation.
"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," ONEOK CEO Pierce H. Norton II, who will head the combined company, said in a statement.
The deal, expected to close in 3Q23, should be accretive to ONEOK's earnings per share beginning in 2024, with EPS accretion of 3% to 7% per year from 2025 through 2027.
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.
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Read the article online at: https://www.worldpipelines.com/business-news/15052023/oneok-to-buy-magellan-midstream-partners-for-us188-billion/
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