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ONEOK Inc OKE-N agreed on Sunday to buy U.S. pipeline operator Magellan Midstream Partners MMP-N in a cash-and-stock deal valued at about $18.8 billion including debt, bringing natural gas-focused ONEOK into transporting refined products and oil.

ONEOK will pay $25 and 0.6670 shares of ONEOK common stock for each outstanding Magellan common unit, representing a premium of 22% based on Magellan shares’ closing price on May 12. The buyer will also assume Magellan’s $5 billion debt pile.

The deal will give ONEOK, until now a transporter of natural gas liquids and natural gas, access to Magellan’s refined products and crude oil transportation business. The combined company will have 44% of its business in NGLs, and 21% in refined products, according to a presentation.

“The combination of ONEOK and Magellan will create a diversified North American midstream infrastructure company with predominately fee-based earnings, a strong balance sheet and significant financial flexibility,” ONEOK CEO Pierce H. Norton II, who will head the combined company, said in a statement.

The deal comes as U.S. natural gas prices have struggled this year because of oversupply concerns. Crude prices have traded off in 2023 on potential recession fears, although not as badly has natural gas.

It will create a “more resilient energy infrastructure company that is expected to produce stable cash flows through diverse commodity cycles,” per the statement.

The deal, expected to close in the third quarter of 2023, should be accretive to ONEOK’s earnings per share beginning in 2024, with EPS accretion of 3% to 7% per year from 2025 through 2027.

Analysts at Raymond James said that although the valuation ONEOK was paying for Magellan was “rich,” the move was “bold,” with strong financials for a combined company that would be considered “top of the class from a scale and diversification perspective.”

Goldman Sachs & Co LLC is serving as lead financial adviser to ONEOK. Morgan Stanley & Co LLC is serving as financial adviser to Magellan.

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