8-KOther Events

ONEOK INC /NEW/ 8-K Report (Oct 17, 2002)

Filed October 17, 2002For Securities:OKE

Summary

ONEOK, Inc. (OKE) has announced a significant strategic acquisition, entering into a definitive agreement with Southern Union Company to purchase its Texas gas distribution assets for approximately $420 million. This transaction, expected to close by December 31, 2002, will add roughly 535,000 customers across major Texas cities like El Paso and Austin, with a strong focus on residential customers. The acquired assets include not only the core gas distribution network but also a natural gas transmission system and other energy-related ventures such as gas marketing and propane sales, along with investments in Mexico. This move is poised to expand ONEOK's operational footprint and customer base within a key growth region, bolstering its position in the energy distribution sector.

Key Highlights

  • 1ONEOK Inc. entered into a definitive agreement to acquire Southern Union Company's Texas gas distribution assets for $420 million.
  • 2The acquisition includes approximately 535,000 gas customers in Texas, serving major cities such as El Paso and Austin.
  • 3Over 90% of the acquired customers are residential, indicating a strong focus on this segment.
  • 4The deal encompasses a 125-mile natural gas transmission system regulated by the Texas Railroad Commission.
  • 5Additional assets include gas marketing, retail propane sales, and natural gas distribution investments in Mexico.
  • 6Operating income for the acquired Texas assets was approximately $41.2 million for the twelve months ending June 30, 2002.
  • 7The transaction is subject to regulatory approvals, including Hart-Scott-Rodino antitrust clearance, with closing anticipated by December 31, 2002.

Frequently Asked Questions

This acquisition is strategically significant as it allows ONEOK to significantly expand its Texas gas distribution operations by adding approximately 535,000 customers in key growth areas like El Paso and Austin. It diversifies the company's asset base and strengthens its position in the energy distribution market.

The total purchase price for the Texas gas distribution assets is $420 million. The transaction is expected to close on or before December 31, 2002, pending regulatory approvals.

The acquisition includes the gas distribution operations serving 535,000 customers, a 125-mile natural gas transmission system, as well as assets related to gas marketing, retail propane sales, and investments in natural gas distribution in Mexico.

For the twelve months ending June 30, 2002, the operating income for these Texas assets was approximately $41.2 million, with about 95% of that income derived from the Texas gas distribution operations.