425: WES & Aris Set Merger Election Deadline, HSR Cleared

Western Midstream and Aris Water Solutions announce the October 7, 2025 election deadline for merger consideration and the expiration of the Hart-Scott-Rodino Act waiting period.

Summary

• Western Midstream Partners, LP (WES) and Aris Water Solutions, Inc. (Aris) jointly announced the election deadline for Aris securityholders to elect their preferred form of merger consideration.
• The Election Deadline is set for 5:00 p.m., New York time, on October 7, 2025.
• The transaction is expected to close on October 15, 2025, contingent on Aris stockholder approval and other customary closing conditions.
• Aris securityholders can elect to receive one of three consideration options: (i) 0.625 WES Common Units, (ii) a combination of $7.00 in cash and 0.450 WES Common Units, or (iii) $25.00 in cash.
• The cash election consideration is subject to proration, ensuring the total cash consideration paid in the transaction does not exceed $415.0 million.
• Securityholders who do not submit a properly completed election form by the deadline will be deemed to have elected the 0.625 WES Common Units.
• The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) expired on September 26, 2025, fulfilling a significant condition for the transaction's completion.

Sentiment

Score: 7

Explanation: The filing indicates clear progress on a major corporate action (merger), with the HSR waiting period expiring and an election deadline set. This reduces uncertainty regarding the transaction's path to completion. However, the potential for cash consideration proration and standard merger-related risks temper the overall positive sentiment.

Positives

• The expiration of the HSR Act waiting period on September 26, 2025, satisfies an important regulatory condition, moving the merger closer to completion.
• The establishment of a clear election deadline and an expected closing date provides certainty and a defined timeline for the transaction.
• Aris securityholders are offered flexibility with three distinct merger consideration options, including cash, WES common units, or a combination.

Negatives

• The cash election consideration is subject to proration, which could result in securityholders receiving less cash than elected if the total cash demand exceeds $415.0 million.
• Securityholders holding shares through a bank, broker, or other nominee may be subject to an earlier election deadline, requiring careful attention to their specific instructions.
• Failure to submit a properly completed election form by the deadline will result in a default to the common unit election, potentially overriding a securityholder's preferred consideration.

Risks

• The expected timing and likelihood of completing the Transaction, including the timing, receipt, and terms of any required governmental and regulatory approvals that could reduce anticipated benefits or cause the parties to abandon the Transaction.
• The ability to successfully integrate the businesses of WES and Aris.
• The occurrence of any event, change, or other circumstances that could lead to the termination of the Merger Agreement.
• The possibility that stockholders of Aris may not approve the Merger Agreement.
• The risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all.
• Risks related to disruption of management time from ongoing business operations due to the Transaction.
• The risk that any announcements relating to the Transaction could have adverse effects on the market price of WES Common Units or Aris's Class A common stock.
• The risk that the Transaction and its announcement could adversely affect the ability of WES and Aris to retain customers and key personnel, and maintain relationships with their suppliers and customers.
• The risk that the pending Transaction could distract management of both entities and lead to substantial costs.
• The risk that problems may arise in successfully integrating the businesses, potentially resulting in the combined company not operating as effectively and efficiently as expected.
• The risk that the combined company may be unable to achieve anticipated synergies or that it may take longer than expected to achieve those synergies.

Future Outlook

The transaction is expected to close on October 15, 2025, subject to Aris stockholder approval and the satisfaction of other customary closing conditions. The combined company anticipates achieving synergies and operating effectively, though the forward-looking statements acknowledge various risks related to integration, regulatory approvals, and the realization of anticipated benefits.

Industry Context

This merger combines a master limited partnership focused on developing, acquiring, owning, and operating midstream energy assets (WES) with an environmental infrastructure and solutions company specializing in full-cycle water handling and recycling for energy operations in the Permian Basin (Aris). This transaction aligns with broader industry trends of consolidation within the energy sector, particularly in midstream and essential services, and highlights the increasing importance of sustainable water management solutions in major oil and gas producing regions like the Permian Basin.

Stakeholder Impact

• **Shareholders (Aris)**: Will receive merger consideration in cash, WES common units, or a combination, based on their election and subject to proration for cash. They will also participate in a special meeting to vote on the merger.
• **Shareholders (WES)**: Will see an increase in outstanding common units if Aris shareholders elect unit consideration, potentially impacting ownership percentages.
• **Employees**: The merger could lead to integration efforts that may affect employees of both companies, though specific impacts are not detailed in this filing.
• **Customers**: Both WES and Aris aim to retain customers, but the integration process of the combined entity could potentially lead to changes in service delivery or relationships.
• **Suppliers**: Maintaining relationships with suppliers is a stated goal, but the merger could introduce changes in procurement or partnership structures.

Next Steps

• Aris securityholders must deliver properly completed and signed election forms or online elections to the Exchange Agent by 5:00 p.m., New York time, on October 7, 2025.
• Aris securityholders will vote on the proposal to approve the Merger Agreement at a special meeting scheduled for October 14, 2025.
• The Transaction is expected to close on October 15, 2025, subject to Aris stockholder approval and the satisfaction of other customary closing conditions.

Key Dates

Recommendation

The filing confirms that the merger is progressing as expected, with key regulatory approvals secured and a clear timeline for completion. This reduces uncertainty, which is generally positive. However, the inherent risks associated with merger integration, potential proration of cash consideration, and the need to assess the combined entity's future performance warrant a 'hold' recommendation for existing investors. New investors should await further clarity on integration success and post-merger operational details before making a definitive investment decision.

Keywords

Merger, Acquisition, Western Midstream, Aris Water Solutions, WES, ARIS, SEC Filing, HSR Act, Election Deadline, Merger Consideration, Midstream, Water Solutions, Permian Basin, Corporate Action