ONEOK and EnLink Midstream announced that they have executed a definitive merger agreement under which ONEOK will acquire all of the outstanding publicly held common units of EnLink for $4.3 billion in ONEOK common stock.
Under the agreement, each outstanding common unit of EnLink that ONEOK does not already own will be converted into 0.1412 shares of ONEOK common stock. The exchange ratio was derived by dividing $15.75 per unit, equal to EnLink’s market close price on Nov. 22, 2024, by ONEOK’s 10-day volume-weighted average price (VWAP).
In the aggregate, ONEOK will issue about 37 million shares in connection with the proposed deal, representing approximately 6% of the total ONEOK shares outstanding upon the transaction’s consummation.
The Board of Directors of the managing member of EnLink delegated to the Conflicts Committee of such board, consisting of three independent directors, the authority to review, evaluate, negotiate, and approve the deal. The EnLink Conflicts Committee – after evaluating the transaction with its independent legal and financial advisors, unanimously determined that the transaction was in the best interests of EnLink and the public unitholders and approved the transaction.
The EnLink Conflicts Committee also recommended approval of the transaction to the EnLink Board, which also unanimously approved the deal. Subject to the satisfaction of customary closing conditions, completion of the deal is expected to occur in the first quarter of 2025.
The merger’s completion is subject to the approval of a majority of the outstanding EnLink common units (such as common units owned by ONEOK) and other customary closing conditions. ONEOK committed to voting its units, representing about 44% of the outstanding EnLink common units, in favor of the transaction. No ONEOK shareholder vote is required to complete the deal.
On October 15, 2024, ONEOK had announced the completion of its acquisition of Global Infrastructure Partners’ (GIP) entire interest in EnLink for a total cash consideration of approximately $3.3 billion .
Goldman Sachs is serving as lead financial advisor to ONEOK. And Barclays and Citi also advised ONEOK. Kirkland & Ellis is serving as ONEOK’s legal advisor. Evercore is acting as financial advisor and Richards, Layton & Finger is acting as legal advisor to the EnLink Conflicts Committee, and Baker Botts is acting as legal advisor to EnLink.
KEY QUOTE:
“This tax-free transaction to acquire the remaining outstanding EnLink units is expected to be accretive to ONEOK shareholders and provide EnLink unitholders with significantly greater trading liquidity and an attractive dividend yield.”
“ONEOK has a longstanding reputation as being intentional in building a premier energy infrastructure company. This next step further solidifies that status, allowing us to continue expanding and extending our value chain, while creating value for our stakeholders.”
– Pierce H. Norton II, ONEOK president and chief executive officer
