Item 1.01 Entry into a Material Definitive Agreement.
On August 20, 2018, Magellan OLP, L.P. (Magellan OLP), a wholly-owned subsidiary of Magellan Midstream Partners, L.P. (the
Partnership), entered into a Membership Interest Purchase Agreement (the Agreement) with Plains Pipeline, L.P. (Plains and together with Magellan OLP, the Sellers), and Mapleleaf Midstream, LLC
(Mapleleaf), a subsidiary of OMERS, the defined benefit pension plan for municipal employees in Ontario, Canada, along with OMERS Infrastructure Management Inc., the infrastructure investment manager of OMERS. Pursuant to the Agreement,
Magellan OLP has agreed to sell a 20% ownership interest in BridgeTex Pipeline Company, LLC (BridgeTex), and Plains has agreed to sell a 30% ownership interest in BridgeTex, to Mapleleaf, in exchange for aggregate cash consideration of
$1.4375 billion, subject to certain working capital adjustments, of which Magellan OLP will receive $575,000,000 (the Transaction). The proceeds from the Transaction will be used to repay borrowings outstanding under the
Partnerships commercial paper program or for general partnership purposes, which may include capital expenditures.
The Transaction
is expected to close in the fourth quarter of 2018, subject to certain customary conditions to closing set forth in the Agreement, including, among others, the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. The Agreement contains customary representations, warranties and covenants of the parties, including several, not joint, representations and warranties by the Sellers relating to themselves and BridgeTex. The
Sellers have agreed, severally and not jointly, to indemnify Mapleleaf for certain losses resulting from breaches of their representations, warranties and covenants contained in the Agreement, subject to certain limitations and survival periods. The
Agreement also contains certain termination rights of the parties, including if the Transaction has not closed before December 15, 2018. Following the consummation of the Transaction, Magellan OLP, Plains and Mapleleaf will own 30%, 20% and
50%, respectively, of the outstanding ownership interests in BridgeTex.
A copy of the Agreement is attached hereto as Exhibit 2.1 to this
Current Report on Form
8-K
and is incorporated by reference herein. The foregoing description of the Agreement is only a summary and does not purport to be complete, and is qualified in its entirety by
reference to the Agreement.