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.