Tulsa-based ONEOK Inc. announced Tuesday its $1.2 billion sale of three wholly owned interstate pipeline systems to DT Midstream. Weil and Skadden announced Wednesday that they advised on the deal.
Under terms of the all-cash transaction, ONEOK is selling to Detroit-headquartered DT Midstream:
- Guardian Pipeline, which connects local gas distribution and electric generation companies in Wisconsin with the Chicago Hub near Joliet, Ill.
- Midwestern Gas Transmission, a bidirectional pipeline that connects multiple access points in the Utica Shale and Marcellus Shale to the Chicago Hub, and
- Viking Gas Transmission, another bidirectional system with connections between Marshfield, Wisc. and Emerson, Manitoba, at the U.S.-Canadian border.
Skadden advised ONEOK with an all-Houston team that included M&A Partner Eric Otness and associate Nicholas Woodruff, tax partner Jeff Romero, and corporate associates Libby Rudolf and Robert Clary.
Weil advised DT Midstream, headquartered in Detroit, with an all-Texas team led by Houston partner Omar Samji with Houston associates Sarah George, Greg Kerr, Trace Hancock, Matthew Kim and Ben Jamison, as well as Dallas associates Parker Lawter, Sam Rosenbloom and Nneka Ukpaby.
The pipelines have a total capacity of more than 3.7 Bcf/d with approximately 1,300 miles across seven states in the attractive Midwest market region which is expected to experience continued growth in power demand. The acquisition price represents an approximately 10.5x 2025 EBITDA multiple.
The transaction is expected to close in the fourth quarter of 2024.