EPS - Oneok to buy Magellan Midstream Partners in deal valued at $18.8B

2023-05-14 18:39:53 ET

Oneok ( NYSE: OKE ) said Sunday it agreed to acquire Magellan Midstream Partners ( MMP ) in a cash and stock deal valued at ~$18.8B including assumed debt, resulting in a combined company with a $60B total enterprise value.

The consideration will consist of $25/share in cash and 0.667 common share of Oneok ( OKE ) for each outstanding Magellan ( MMP ) common unit, representing a current implied value to each Magellan unitholder of $67.50/unit for a 22% premium based on the May 12 closing price.

Oneok ( OKE ) said it expects the deal to be earnings accretive beginning in 2024, with EPS accretion of 3%-7% per year during 2025-27 and free cash flow per share accretion averaging more than 20% during 2024-27; base synergies are expected to total at least $200M/year.

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

Oneok ( OKE ) expects the combined portfolio will present significant potential for enhanced customer product offerings and increased international export opportunities, which it said could result in total annual transaction synergies exceeding $400M within 2-4 years.

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