ONEOK, Inc. and EnLink Midstream, LLC 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 approximately 37.0 million shares in connection with the proposed transaction, representing approximately 6.0% of the total ONEOK shares outstanding upon consummation of the transaction.
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 transaction. The EnLink Conflicts Committee, after evaluating the transaction with its independent legal and financial advisors, unanimously determined that the transaction is in the best interests of EnLink and the public unitholders and approved the transaction. The EnLink Conflicts Committee recommended approval of the transaction to the EnLink board, which also unanimously approved the transaction. Subject to the satisfaction of customary closing conditions, completion of the transaction is expected to occur in the first quarter of 2025.
The completion of the merger is subject to the approval of a majority of the outstanding EnLink common units (including common units owned by ONEOK) and other customary closing conditions. ONEOK has committed to vote its units, representing approximately 44% of the outstanding EnLink common units, in favor of the transaction. No ONEOK shareholder vote is required to complete the transaction. In addition, no further regulatory approval is necessary, as ONEOK filed under the Hart-Scott-Rodino Act in connection with its previously announced acquisition of the controlling interest in EnLink, and the necessary waiting period, including for this transaction, has been completed.
"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 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."
On Oct. 15, 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 $3.3 billion.
