ONEOK plans to buy Brazos Midstream's natural gas assets in the Permian Basin for $4.425 billion, the Tulsa-based pipeline company announced Aug. 30.
The deal, funded entirely through a $9 billion equity investment from Apollo Global Management, would also let ONEOK pay down roughly $5 billion in existing debt without issuing new stock. It marks the latest in a string of multibillion-dollar acquisitions by the S&P 500 company headquartered at 100 W. Fifth St. in downtown Tulsa.
"These assets add a premier Permian Midland Basin platform supported by long-term contracts and attractive growth opportunities," ONEOK President and CEO Pierce H. Norton II said in the company's announcement.
How the money works
Apollo, a New York-based investment firm managing about $1.05 trillion in assets as of June 30, will take a nonvoting minority stake in a newly formed ONEOK holding company. The stake carries no board seats and no liquidation preference.
ONEOK said the investment's internal rate of return is capped at 7.0% for the first nine years. The company can buy out Apollo's remaining interest starting on the eighth anniversary of closing, or earlier if the balance drops to $200 million.
After using $4.425 billion for the Brazos purchase, ONEOK said it will direct the remaining $5 billion toward retiring debt. That includes repaying a $1.2 billion term loan and tendering for senior notes the company said are trading below par. The combined paydown would bring ONEOK's projected 2027 leverage to about 3.25 times debt-to-EBITDA, according to the announcement.
Credit rating agencies reviewed the deal and consider it credit-enhancing, ONEOK said.
Latest in a series of deals
The Brazos deal extends a buying spree that has reshaped ONEOK since 2023. The company completed its $14.1 billion acquisition of Magellan Midstream Partners that year, according to published financial reports. In 2024, ONEOK added the $2.6 billion purchase of Medallion Midstream and a $3.3 billion deal for a controlling stake in EnLink Midstream.
The company employs more than 6,300 people and carries a market capitalization of about $60 billion. ONEOK reported second-quarter net income of $967 million, up 13% year-over-year, and raised its full-year adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) guidance to a midpoint of $8.35 billion, according to its Aug. 3 earnings report.
The board approved both deals unanimously. The Apollo investment is expected to close in the first half of September. The Brazos acquisition is expected to close in the fourth quarter of 2026, pending Hart-Scott-Rodino antitrust clearance.
