EnLink Midstream completes merger with ONEOK

In a significant move within the energy sector, EnLink Midstream, LLC (NYSE:ENLC), a $6.45 billion market cap company with annual revenues of $6.65 billion, has successfully completed its merger with ONEOK , Inc. (NYSE:OKE), as detailed in a recent SEC 8-K filing.

According to InvestingPro data, EnLink has maintained consistent dividend payments for 11 consecutive years, with a current yield of 3.75%. The transaction closed today, marking the culmination of a process that began with an agreement on November 24, 2024.

The merger unfolded in two stages, initially with EnLink Midstream, LLC merging into a subsidiary of ONEOK, and subsequently, the merged entity consolidating into Elk Merger Sub II, L.L.C., with the latter surviving as a direct, wholly-owned subsidiary of ONEOK.

Concurrent with the merger, EnLink repaid all obligations under its existing credit agreement and terminated the associated lender commitments. This move aligns with the broader financial restructuring associated with the merger. InvestingPro analysis shows EnLink’s financial position includes $4.87 billion in total debt and a debt-to-equity ratio of 5.15, highlighting the importance of this restructuring. The company’s current ratio of 0.42 indicates that addressing short-term obligations was a key consideration in the merger strategy.

As a result of the merger, all common units of EnLink not already owned by ONEOK were converted into a right to receive 0.1412 shares of ONEOK common stock. The transaction also involved the assumption of outstanding awards of restricted incentive units and performance units of EnLink by ONEOK, which were converted into restricted stock unit awards of ONEOK common stock.

In accordance with the merger’s completion, EnLink has notified the New York Stock Exchange (NYSE) of its intent to delist its common units and has requested the suspension of its reporting obligations under the Exchange Act.

ONEOK has also assumed the obligations of the newly merged subsidiary under various indentures and outstanding senior notes, with guarantees provided by both the subsidiary and EnLink Midstream Partners, LP. These financial arrangements reflect the integrated operations of the merged entities.

The merger signifies a strategic consolidation in the natural gas transmission industry, with ONEOK expanding its footprint through the acquisition of EnLink Midstream, LLC. With an EBITDA of $1.36 billion and a FAIR overall Financial Health Score according to InvestingPro, EnLink brings significant operational strength to the combined entity. This information is based on a press release statement and the full implications of the merger will unfold as the integrated entity moves forward. For detailed analysis of the merger’s implications, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

For further details, the SEC filing and associated exhibits provide comprehensive information on the merger agreements, supplemental indentures, and corporate restructuring following the merger.

In other recent news, EnLink Midstream has provided additional voluntary disclosures related to its ongoing merger with ONEOK, Inc.

The Dallas-based natural gas transmission company, with a market capitalization of $7.32 billion and annual revenue of $6.65 billion, aims to address alleged deficiencies in the merger’s proxy statement/prospectus. The merger process involves EnLink merging with two subsidiaries of ONEOK, resulting in EnLink becoming a part of ONEOK.

Simultaneously, EnLink Midstream’s CEO, Jesse Arenivas, has stepped down, aligning with the acquisition’s completion by ONEOK, anticipated for the first quarter of 2025. His departure does not result from any disagreement with either the Manager or ENLC.

EnLink Midstream’s stock has been downgraded by Raymond (NSE:RYMD) James to Market Perform from Outperform, and also by Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) from Overweight to Equalweight. This change in ratings considers the stock’s current valuation and potential acquisition costs by ONEOK, Inc.

ONEOK, Inc. has completed its $2.6 billion acquisition of Medallion Midstream, expanding its assets in the Permian Basin’s Midland region. The acquisition is expected to yield substantial commercial synergies due to the interconnectedness of the Medallion and ONEOK pipelines.

These are recent developments in the operations of EnLink Midstream and ONEOK, Inc., which have seen significant changes after ONEOK’s acquisition of a major stake in EnLink Midstream.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.