ONEOK, Inc. (OKE, Financial) has entered into a definitive merger agreement with EnLink Midstream, LLC, marking a significant strategic move in the energy sector. The merger, announced on November 24, 2024, involves a two-step process where EnLink will first merge with a wholly owned subsidiary of ONEOK, followed by a second merger with another subsidiary, resulting in EnLink becoming a direct wholly owned subsidiary of ONEOK.
The boards of directors of both ONEOK and EnLink have unanimously approved the merger agreement, which outlines that each EnLink common unit will be converted into the right to receive 0.1412 shares of ONEOK common stock. This exchange ratio reflects the strategic value and potential synergies anticipated from the merger.
The merger agreement also addresses the treatment of EnLink's Series B preferred units, which will be redeemed for cash or exchanged for EnLink units prior to the merger's effective time. This transaction is expected to streamline operations and enhance shareholder value.
Completion of the merger is contingent upon customary closing conditions, including approval from EnLink unitholders, regulatory approvals, and the effectiveness of ONEOK's registration statement. The merger is anticipated to qualify as a tax-free reorganization under the Internal Revenue Code.
ONEOK and EnLink have also entered into a support agreement, with ONEOK committing to vote its EnLink units in favor of the merger. This agreement underscores the commitment of both parties to successfully complete the transaction.
The merger is expected to close by May 23, 2025, subject to the satisfaction of all conditions. This strategic merger is poised to enhance ONEOK's market position and operational efficiencies, benefiting stakeholders and positioning the company for future growth.
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