Oil pipeline operator
Oneok
agreed to buy rival
Magellan
in a deal that values the company at about $19 billion.
Oneok
(ticker: OKE) will pay
Magellan Midstream Partners
(MMP) shareholders $25 and 0.6670 shares of Oneok common stock, representing a premium of about 22% on Magellan’s closing price Friday, Oneok said in a press release Sunday. The company will also assume $5 billion of Magellan’s debt.
Oneok shares fell 9.3% at the open Monday to $57.81. Magellan stock jumped 13.3% to $62.78.
The merger creates a company with an enterprise value of about $60 billion and more than 25,000 miles of liquid-oriented pipelines. It gives Oneok, until now mainly a transporter of natural gas, access to transportation of crude oil and refined products. It comes after a year in which both oil and gas prices spiked after Russia invaded Ukraine and then fell back on concerns that supply will remain ample and demand will weaken.
“The combination of Oneok and Magellan will create a diversified North American midstream infrastructure company,” said Pierce H. Norton, Oneok’s chief executive officer.
Write to Brian Swint at brian.swint@barrons.com
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