8-KMaterial AgreementsSecurities & ListingRegulation FD+2

ONEOK INC /NEW/ 8-K Report, Material Agreement (Aug 31, 2026)

Filed August 31, 2026For Securities:OKE

Summary

ONEOK, Inc. has entered into a significant strategic transaction with AP Falcon Holdings LLC, an affiliate of Apollo Global Management, Inc. This transaction involves a $9 billion cash contribution from the Investor into a newly formed subsidiary, ONEOK Holdings, L.L.C., in exchange for Class B Units. Concurrently, ONEOK is contributing its existing operations (ONEOK, L.L.C.) to this holding company for Class A Units. This structure is designed to facilitate a larger acquisition and significant debt reduction for ONEOK, utilizing the proceeds from the Investor's contribution. The agreement outlines a new operating agreement for the holding company, detailing distribution mechanisms, performance-based allocations for the Class B Member, and robust buyout and conversion rights for the Class A Member over time. Key to investors is the clear framework for capital allocation and potential future liquidity events, ensuring alignment of interests while providing a structured exit or conversion path for the Investor. The transaction is subject to customary closing conditions and is expected to close by September 10, 2026, pending the consummation of a related reorganization and an acquisition of Brazos Midland, LLC.

Key Highlights

  • 1ONEOK is entering into a $9 billion contribution agreement with AP Falcon Holdings LLC (an Apollo affiliate) to inject capital into a new holding company structure.
  • 2The transaction involves the creation of Class A and Class B units in the new holding company, with the Investor receiving Class B Units and ONEOK receiving Class A Units representing its operating business.
  • 3Proceeds from the Investor's capital contribution are earmarked for funding a significant acquisition (Brazos Midland) and extinguishing approximately $5 billion in ONEOK's outstanding indebtedness.
  • 4A new operating agreement for the holding company defines quarterly distributions, including specific allocation percentages and dollar amounts to Class B and Class A members, which evolve over time and are influenced by leverage ratios.
  • 5The agreement includes detailed provisions for a "Base Return" on Class B Units and a "Buyout Right" allowing the Class A Member to purchase Class B Units under various conditions and price structures, including options for redemption.
  • 6The Class B Member has an "Equity Conversion Right" after 20 years to convert its units into publicly traded common equity of ONEOK at a specified price.
  • 7ONEOK is also undertaking a holding company reorganization to streamline operations and facilitate the transaction, with Falcon TopCo becoming the successor entity, renamed ONEOK, Inc.

Frequently Asked Questions

The $9 billion cash contribution from AP Falcon Holdings LLC is primarily intended to fund ONEOK's acquisition of Brazos Midland, LLC, and to extinguish approximately $5 billion of ONEOK's outstanding indebtedness. This transaction restructures ONEOK's capital base and supports its growth strategy through a new holding company framework.

Distributions from the holding company will be made quarterly at the discretion of the board. During an "Initial Period," the Class B Member (Investor) will receive a percentage of cash flow from operations, which can be increased by the Class A Member (ONEOK). After this period (the "Base Capital Period"), the Class B Member receives a fixed quarterly amount, with the remainder going to the Class A Member. These arrangements evolve over time, with specific terms for deferred distributions and special distributions also outlined.

AP Falcon Holdings LLC has several key options. They can be bought out by the Class A Member (ONEOK) through a "Buyout Right" at a price determined by the "Base Return" on their investment, with the price increasing over time. After 20 years, they have an "Equity Conversion Right" to convert their Class B Units into publicly traded ONEOK common equity at a specified discount to a calculated value. Additionally, a "Material Breach Redemption Right" exists for the Class B Member in case of certain breaches by ONEOK.

Yes, ONEOK is undergoing a holding company reorganization where Falcon TopCo will become the successor issuer, renamed ONEOK, Inc., and will be listed on the NYSE under the symbol 'OKE'. Existing ONEOK stockholders will become stockholders of the new entity, Falcon TopCo, with their shares automatically converted. The trading of ONEOK's common stock is expected to continue uninterrupted.