Transmission specialists ONEOK will acquire all the outstanding publicly held units of EnLink in an all-stock merger transaction valued at $4.3 billion. In October, ONEOK completed the acquisition of Global Infrastructure Partners’ (GIP) entire interest in EnLink for $3.3 billion in cash, giving them a 43% stake in the Dallas-based midstream operator. Following the all-stock deal, ONEOK will hold a 100% stake in EnLink.
EnLink Midstream provides integrated energy infrastructure services for natural gas, oil, condensate, and NGLs, as well as CO2 transportation for carbon capture and sequestration. It operates around 13,600 miles of pipelines, 25 natural gas processing plants with roughly 5.9 Bcf/D of processing capacity, and seven fractionators with 320,000 B/D of fractionation capacity. The company’s core assets include natural gas infrastructure in the Permian Basin, Louisiana, Oklahoma, and North Texas.
“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,” said Pierce H. Norton II, ONEOK president and CEO. “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.”
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. ONEOK expects to issue approximately 37 million shares in connection with the proposed transaction, representing approximately 6% of the total ONEOK shares outstanding upon consummation of the transaction.
Subject to the satisfaction of customary closing conditions, completion of the transaction is expected to occur in the first quarter of 2025.
Two weeks after closing the deal for GIP’s interest in EnLink, ONEOK also concluded a deal to acquire Medallion Midstream from GIP in a cash deal worth $2.6 billion. Medallion operated one of the largest privately held crude gathering and transportation systems in the Permian’s Midland basin. The deal included more than 1,200 miles of crude oil gathering pipelines providing around 1.3 million B/D of capacity and approximately 1.5 million bbl of crude oil storage in the Permian Basin.
ONEOK worked to offset a bit of its spending spree during this time. Earlier this month, it reached a deal with DT Midstream to sell its three wholly owned interstate natural gas pipeline systems for $1.2 billion in cash. The three interstate pipeline systems include Guardian Pipeline LLC, which interconnects with several pipelines at the Chicago Hub near Joliet, Illinois, and with local natural gas distribution and electric generation companies in Wisconsin; Midwestern Gas Transmission, which is a bidirectional system with a major pipeline interconnect near Portland, Tennessee, and with multiple interstate pipelines that have access to both the Utica Shale and the Marcellus Shale, and multiple interstate pipelines at the Chicago Hub near Joliet; and Viking Gas Transmission, which is a bidirectional system that interconnects with a major pipeline system at the US border near Emerson, Canada, and Marshfield, Wisconsin.
ONEOK said it would use proceeds from the sale to enhance its financial flexibility as well as its deleveraging trend toward its previously announced target of 3.5 times during 2026.
