Oneok has agreed to acquire remaining stake that it does not own in the pipeline company Oneok Partners for $9.3bn in a bid to simplify its structure and increase returns.
Oneok currently owns about 40% stake in the publicly traded master limited partnership Oneok Partners.
Under the terms of the deal, Oneok Partners’ each share will be converted to 0.985 share of Oneok, or a value of about $54.28 per share.
ONEOK Partners and ONEOK president and CEO Terry Spencer said: "A broad asset footprint, stable cash flows and attractive growth prospects remain core to our long-term growth strategy."
Spencer said that the Oneok, with the latest acquisition, will become a standalone company with a lower cost and stronger cash flow generation.
Upon completion of the deal, Oneok is expected to have a more than $30bn enterprise value, the company said.
It will have an integrated 37,000-mile network of natural gas liquids and natural gas pipelines, processing plants, fractionators and storage facilities located in the Williston Basin, Mid-Continent, Permian Basin, Midwest and Gulf Coast.
Spencer added: "We also anticipate the transaction will provide ONEOK enhanced access to the broader capital markets to support and fund future growth to meet the needs of our customers.
"The merger of our companies will enhance future opportunities for our businesses and employees, allowing us to continue growing as one of North America's largest midstream service providers."
The deal, which is expected to be completed in the second quarter of 2017, is subject to the satisfaction of customary conditions, including approvals of Oneok shareholders and Oneok Partners unitholders.
Image: Oneok will acquire stake in pipeline firm Oneok Partners to simplify its structure. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.