ONEOK, Inc. [OKE.N] and EnLink Midstream, LLC [ENLC.N] have announced that they have executed a definitive merger agreement under which ONEOK will acquire all of EnLink’s outstanding publicly held common units for US$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 US$15.75 per unit, equal to EnLink’s market close price on 22 November 2024, by ONEOK’s 10-day volume-weighted average price (VWAP).
In the aggregate, ONEOK will issue approximately 37.0 million shares in connection with the proposed transaction, representing approximately 6.0% of the total ONEOK shares outstanding upon the transaction’s consummation.
The EnLink Board delegated authority to its independent Conflicts Committee to review and approve the transaction. After a thorough evaluation with independent legal and financial advisors, the three-member Committee unanimously approved the merger, determining it serves the best interests of EnLink and its public unitholders. Following the Committee’s recommendation, the EnLink Board also gave unanimous approval. The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions.
The completion of the merger is contingent upon obtaining approval from a majority of the outstanding common units of EnLink, including those owned by ONEOK, along with other standard closing conditions. ONEOK, which holds approximately 44% of EnLink’s outstanding common units, has pledged to vote in favor of the transaction. The completion of the merger does not require a vote from ONEOK’s shareholders. Additionally, no further regulatory approvals are needed, as ONEOK has already complied with the Hart-Scott-Rodino Act by filing during its prior acquisition of a controlling interest in EnLink. The necessary waiting period has already elapsed, satisfying the regulatory requirements for this transaction.
“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 Chief Executive Officer.
“ONEOK has a longstanding reputation for intentionally 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.”
On 15 October 2024, ONEOK announced the successful completion of its acquisition of Global Infrastructure Partners’ (GIP) entire interest in EnLink for a total cash consideration of approximately US$3.3 billion.
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