TULSA, OKLA. -- August 29, 2026 -- ONEOK, Inc. (NYSE: OKE) signed a definitive agreement on Aug. 30, 2026, to acquire Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for $4.425 billion in cash. Funds and affiliates managed by Apollo (NYSE: APO) will fund the purchase through a $9 billion nonvoting minority equity investment in ONEOK, with $5 billion of that sum earmarked to retire existing ONEOK debt. ONEOK's board approved both transactions unanimously, and the Brazos acquisition is expected to close in the fourth quarter of 2026.
ONEOK Funds Deal With $9 Billion Apollo Equity, No New Stock
Apollo will hold a Class B interest in a newly formed holding company, ONEOK Holdings, L.L.C., entitled to 15% of quarterly cash flow from ONEOK's operating subsidiary. The investor's return is capped at a 7.0% internal rate of return for the first nine years, rising to 7.35% in year 10 and topping out at 7.85% in year 15. ONEOK can buy back the remaining Class B stake starting on the eighth anniversary of closing, or sooner if the capital account balance falls to $200 million. The structure carries no liquidation preference, no board seats and sits subordinate to all existing senior debt.
"These assets add a premier Permian Midland Basin platform supported by long-term contracts and attractive growth opportunities," said Pierce H. Norton II, ONEOK president and CEO.
Brazos Assets Add 600,000 Acres Under 12-Year Contracts
The acquired system is backed by roughly 600,000 dedicated acres under long-term, fixed-fee contracts with a weighted average remaining term exceeding 12 years. Fourteen active drilling rigs currently operate on the dedicated acreage, run by producers including ExxonMobil, Diamondback Energy and Double Eagle. The deal also gives ONEOK a Permian Midland Basin-wide area of mutual interest with a key private producer.
Cassidy II Expansion Doubles ONEOK's Midland Processing Capacity
Once the Cassidy II processing plant comes online in the third quarter of 2027, the Brazos Midland system will span approximately 700 miles of gathering infrastructure and 1.2 billion cubic feet per day of processing capacity across seven Permian Midland Basin counties. Combined with ONEOK's existing footprint, the transaction more than doubles the company's Midland Basin processing capacity to approximately 2.3 Bcf/d, including plants under construction. ONEOK values the transaction at approximately 7.5 times estimated 2027 EBITDA, including roughly $80 million of full-year synergies, and 6.0 times estimated 2028 EBITDA.
Debt Extinguishment Cuts Leverage to 3.25x Ahead of Schedule
ONEOK intends to extinguish approximately $5 billion of outstanding debt using proceeds from the Apollo investment, cutting expected pro forma 2027 leverage to about 3.25 times debt-to-EBITDA without issuing any common equity. The plan includes a cash tender offer for senior notes trading below par, repayment of a $1.2 billion term loan, and make-whole calls on certain note series. Apollo Partner Jamshid Ehsani said the transaction reflects the firm's ability to deliver flexible, high-grade capital solutions structured around ONEOK's long-term objectives.
Deal Closes in Fourth Quarter Pending Antitrust Clearance
The Brazos acquisition remains subject to customary closing conditions, including Hart-Scott-Rodino Act clearance, while the minority equity investment is expected to close in the first half of September 2026. Barclays served as sole financial advisor to ONEOK on the acquisition and lead financial advisor on the equity investment, with Lazard also advising on the equity deal. Latham & Watkins LLP advised ONEOK on both transactions, RBC Capital Markets and Milbank LLP advised Apollo, and Akin Gump Strauss Hauer & Feld LLP advised Brazos Midstream, which is backed by Old Ironsides Energy and EnCap Flatrock Midstream.