ONEOK to Acquire EnLink Midstream for $4.3 Billion in Stock

ONEOK Inc. has announced a significant acquisition of EnLink Midstream LLC for $4.3 billion, with the transaction expected to close in early 2025. This move may impact stock prices as investors evaluate potential growth and equity dilution.

Date: 25-11-2024

AI Rating: 6

The report outlines the pending acquisition of EnLink Midstream LLC by ONEOK Inc. for a substantial amount of $4.3 billion. This acquisition will be conducted through the issuance of ONEOK common stock, which has implications for both companies and their shareholders.

Since ONEOK will issue approximately 37.0 million new shares to complete this transaction, this could potentially dilute the earnings per share (EPS) for existing ONEOK shareholders. The exchange agreement specifies that each common unit of EnLink that ONEOK does not already possess will convert into 0.1412 shares of ONEOK common stock, based on EnLink's market price of $15.75. This valuation can be seen as a premium for EnLink’s investors, but it also indicates that ONEOK is valuing the acquisition at a high potential growth.

The timeline for completion is set for the first quarter of 2025, which may induce speculation regarding ONEOK's strategic positioning in the market. Investors might have mixed feelings about this acquisition, as it involves both the benefits of expanded ownership and potential risks associated with equity dilution.

Stocks: OKE ENLC