On Sunday, May 14, 2023, Magellan Midstream Partners (MMP) and pipeline operator ONEOK (OKE) entered into a definitive merger agreement under which ONEOK will acquire Magellan in a cash-plus-stock transaction valued at approximately $18.8 billion. The transaction will result in a combined company with a total enterprise value of $60 billion.
The deal comes at a time when U.S. natural gas prices are grappling with concerns about oversupply. ONEOK, which has been mainly focused on the transportation of natural gas liquids and natural gas, will now have access to Magellan’s crude oil transportation and refined products business.
Headquartered in Tulsa, Oklahoma, Magellan Midstream Partners is a $11.2 billion market cap company operating in the midstream segment of the energy industry. The company’s primary business includes transporting, storing, and distributing petroleum products such as crude oil, gasoline, diesel fuel, and natural gas liquids. Magellan operates a network of pipelines, terminals, storage tanks, and other midstream assets that allow it to move these products efficiently from producers to end-users.
The company’s pipeline system spans over 9,700 miles and has a total storage capacity of more than 100 million barrels. Magellan Midstream Partners also operates marine terminals, which allow for the efficient loading and unloading of petroleum products from ships.
Magellan Midstream Partners has a long history of stable and growing distributions to its unit holders, which has made it a popular investment for income-seeking investors.