Pipeline giant ONEOK (NYSE: OKE) is making a big splash. It's acquiring master limited partnership (MLP) Magellan Midstream Partners (NYSE: MMP) in an $18.8 billion deal. While the combination isn't a perfect strategic fit, it will significantly enhance the combined company's earnings, primarily driven by tax savings. Because of that, it will improve ONEOK's ability to maintain and grow its 6.5%-yielding payout.

The transaction could be a catalyst (and blueprint) for more consolidation in the midstream sector, which is known for paying high-yielding dividends. Here's a closer look at the deal and some companies that might benefit from a similar combination.

ONEOK is acquiring Magellan in a cash-and-stock deal. The pipeline stock is paying 0.667 shares and $25 in cash for each of the MLP's common units. That implies a hefty 22% premium to the MLP's closing price before the deal's announcement. 

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Source Fool.com