The merger between US midstream companies Magellan Midstream and Oneok will proceed after investors today voted in favor of the $18.8bn deal, creating one of the largest oil and gas pipeline companies in North America.
Unitholders for the two Tulsa-based companies voted separately to approve the merger that will see natural gas liquids (NGL)-focused Oneok acquire crude and refined products-oriented Magellan. Preliminary results show 55pc of Magellan unitholders voted in favor, while 96pc of Oneok shareholders gave the deal a green light.
Magellan agreed on 14 May to sell the company to Oneok, touting scale, synergies and cost savings to investors. Significant to the deal were tax implications for each company, but that aspect was problematic for at least one Magellan unitholder, who vocally opposed the transaction, casting doubt on the deal.
The two companies combined will have a 50,000-mile pipeline network in the central US, with about half of the pipelines focused on liquids. Oneok will receive Magellan's 9,800-mile refined products network with 54 terminals spanning from North Dakota to the US Gulf coast. Magellan's crude business is comprised of 2,200 miles of pipeline, including a significant terminal in Houston, Texas, as well as a condensate splitter and 39mn bls of crude oil storage capacity.
The deal is expected to close next week on 25 September.
The resulting company will have an enterprise value of about $60bn.
