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ONEOK Finalizes Purchase of Magellan Midstream Partners
09/27/2023
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21.
ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
ONEOK Inc. is merging with Magellan Midstream Partners LP, forming a significant midstream organization with a valuation of $60 billion. ONEOK is set to procure all the outstanding units of Magellan Midstream in a cash-and-stock deal valued at $18.8 billion, inclusive of the assumed debt.
With this acquisition, ONEOK Inc. integrates refined products and crude oil transportation assets into its existing natural gas and NGL portfolio. This amalgamation has resulted in over 50,000 miles of pipeline infrastructure and ties to nearly half of the U.S.' refining capability, as stated on ONEOK's website.
ONEOK Envisions a Prosperous Future Post-Merger
- The merger is set to forge a predominant figure in the midstream sector, flaunting a combined market capitalization of roughly $40 billion.
- The entity will wield control over more than 25,000 miles of liquid transportation pipelines and will have substantial assets nestled in the Gulf Coast and Midcontinent zones, solidifying its operational footprint.
- The alliance harbors the potential to yield annual synergies surmounting $400 million in the ensuing two to four years. According to Truist analysts, the amalgamation of complementary assets could culminate in operational synergies amounting to a minimum of $200 million post-integration.
- ONEOK envisions the pact bringing forth a favorable influence on the earnings per share (EPS) commencing in 2024. The company projects an annual EPS accretion oscillating between 3% to 7% from 2025 to 2027, highlighting the merger’s contribution to financial growth.
- The realized synergies are predicted to translate into savings of at least $200 million annually, accentuating the economic viability of the merger.
"This marks a pivotal day for both Tulsa and the sector, as we merge the proficient teams of ONEOK and Magellan, envisioning our collective future." He continued, "Our broader product platform will uncover new avenues in ONEOK's fundamental businesses and augment the robustness of our enterprise. We are dedicated to orchestrating a seamless transition with a focus on realizing the myriad advantages of this amalgamation for our clients, employees, and shareholders."
Pierce H. Norton II, the president and CEO of ONEOK
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