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Oneok (OKE 60.00, -3.72, -5.8%): Magellan Midstream (MMP) to be acquired by ONEOK (OKE) for implied value of $67.50 per unit

Magellan Midstream Partners (NYSE:MMP) in a cash and stock deal valued at ~$18.8B including assumed debt, resulting in a combined company with a $60B total enterprise value.

The consideration will consist of $25/share in cash and 0.667 common share of Oneok (OKE) for each outstanding Magellan (MMP) common unit, representing a current implied value to each Magellan unitholder of $67.50/unit for a 22% premium based on the May 12 closing price.

Oneok (OKE) said it expects the deal to be earnings accretive beginning in 2024, with EPS accretion of 3%-7% per year during 2025-27 and free cash flow per share accretion averaging more than 20% during 2024-27; base synergies are expected to total at least $200M/year.

The combined company will own 25K-plus miles of liquids-oriented pipelines, with significant assets and operational expertise at the Gulf Coast and Mid-Continent market hubs.