ONEOK to acquire Brazos Midstream Permian assets for $4.425 billion

Acquisition Scope and Price

ONEOK, Inc. (NYSE: OKE) said on Aug. 30, 2026, that it has executed a definitive agreement to acquire Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for total cash consideration of $4.425 billion. The transaction values Brazos at approximately 7.5x estimated 2027 EBITDA, including $80 million in annual synergies, and 6.0x estimated 2027 EBITDA on a synergy-adjusted basis, according to one of the lead reports.

Funding Structure and Apollo Investment

The acquisition will be funded through a $9 billion nonvoting minority equity investment in ONEOK's existing business from funds and affiliates managed by Apollo (NYSE: APO). The investment carries an internal rate of return (IRR) capped at 7.0% for the first nine years, which ONEOK said is lower than its cost of publicly traded equity. Distributions above the capped IRR will reduce the minority equity capital balance over time, increasing economic value attributable to ONEOK common shareholders.

Debt Extinguishment and Leverage Target

In addition to funding the deal, ONEOK intends to extinguish approximately $5 billion of existing indebtedness using proceeds from the equity investment, immediately reducing expected pro forma 2027 leverage to approximately 3.25 times debt-to-EBITDA. The debt plan will include repayments, make-whole calls and a tender offer for senior notes, with most targeted senior notes currently trading below par, the company said. ONEOK shares were indicated higher during Monday's premarket session following the announcement.

Strategic Rationale From ONEOK's CEO

"This transaction demonstrates ONEOK's strategy of intentionally expanding and extending our integrated energy infrastructure," said Pierce H. Norton II, ONEOK president and CEO. He added that the acquisition expands ONEOK's scale in the Permian Midland Basin, advances its integrated wellhead-to-water strategy and strengthens connectivity across its natural gas and NGL value chain. ONEOK said the deal increases momentum toward the high end of its mid- to high-single-digit adjusted EBITDA growth target over the next five to seven years and is expected to be immediately accretive to earnings and free cash flow per share.

Apollo's Role and Capital Allocation Flexibility

Apollo's Jamshid Ehsani said the transaction reflects Apollo's ability to deliver flexible, high-grade capital solutions at scale, structured around ONEOK's long-term strategic objectives. ONEOK said the combination accelerates deleveraging without issuance of common equity and adds flexibility for capital allocation, including organic growth, potential dividend increases and share buybacks.