Natural gas midstream company Oneok Inc. on Monday announced that it has agreed to purchase Magellan Midstream Partners LP for $18.8 billion, giving the Tulsa-based firm entry into the transportation of crude oil and refined products.

Under the deal, Oneok would acquire all outstanding units of Magellan in a cash-and-stock transaction, resulting in a combined company with a total enterprise value of $60.0 billion. Magellan shareholders are to receive $25.00 in cash and 0.6670 shares of Oneok common stock for each outstanding Magellan common unit. This represents a current implied value to each Magellan unitholder of $67.50/unit, for a 22% premium based on May 12 closing prices.

“Oneok has a long history and track record of being at the forefront of transformational...