425: WES & Aris Announce Merger Consideration Election Results

Western Midstream Partners and Aris Water Solutions jointly announced preliminary results for securityholder elections regarding the form of merger consideration in their pending acquisition.

Summary

• Preliminary results for merger consideration elections were announced as of the October 7, 2025, 5:00 p.m. New York time deadline.
• Aris securityholders could elect to receive Common Unit Election Consideration (0.625 WES Common Units), Mixed Election Consideration ($7.00 cash and 0.450 WES Common Units), or Cash Election Consideration ($25.00 cash).
• The Cash Election Consideration is subject to proration to ensure the total cash consideration does not exceed $415.0 million.
• Holders of 9,589,105 Aris Class A Common Stock shares and 4,289,350 Aris OpCo Stapled Units elected the Common Unit Election Consideration, including those who failed to make a proper election.
• Holders of 1,901,249 Aris Class A Common Stock shares and 9,304,608 Aris OpCo Stapled Units elected the Mixed Election Consideration.
• Holders of 21,247,291 Aris Class A Common Stock shares and 12,873,151 Aris OpCo Stapled Units elected the Cash Election Consideration.
• It is estimated that approximately 26.6 million WES Common Units will be issued and $415.0 million in cash will be paid to Aris securityholders, which is the maximum total cash consideration.
• Aris securityholders who elected the Cash Election Consideration will receive a prorated amount of cash and WES Common Units due to the maximum cash cap being met.
• These results are preliminary and subject to the completion of guaranteed delivery procedures; final certified results are expected shortly before closing.
• No fractional WES Common Units will be issued; holders will receive cash in lieu of any fractional units.

Sentiment

Score: 7

Explanation: The filing indicates the merger is progressing as planned with preliminary election results announced. While cash election proration might disappoint some shareholders, it was an anticipated outcome given the maximum cash consideration cap. The overall sentiment is positive as it signals movement towards transaction completion.

Positives

• The merger consideration election process has progressed to the preliminary results stage, indicating the transaction is moving towards completion.
• The total cash consideration payable ($415.0 million) reached the maximum allowed under the Merger Agreement, suggesting strong demand for cash.

Negatives

• Aris securityholders who elected the Cash Election Consideration will receive a prorated amount of cash and WES Common Units, rather than the full cash amount they elected.

Risks

• Expected timing and likelihood of completion of the Transaction, including the ability to successfully integrate the businesses.
• Occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement.
• Possibility that stockholders of Aris may not approve the Merger Agreement.
• 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.
• Risk that any announcements relating to the Transaction could have adverse effects on the market price of WES Common Units or Aris Class A Common Stock.
• Risk that the Transaction and its announcement could have an adverse effect on the ability of WES and Aris to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally.
• Risk the pending Transaction could distract management of both entities and they will incur substantial costs.
• Risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected.
• Risk that the combined company may be unable to achieve synergies or it may take longer than expected to achieve those synergies.

Future Outlook

The transaction is progressing towards completion, with final certified election results expected shortly before closing. The special meeting for Aris securityholders is scheduled for October 14, 2025. The combined company aims to achieve synergies and operate effectively, though risks related to integration and market effects exist.

Industry Context

Western Midstream operates in natural gas, NGL, and crude oil gathering, processing, and transportation, with a focus on fee-based contracts. Aris Water Solutions is an environmental infrastructure company providing full-cycle water handling and recycling solutions, primarily in the Permian Basin. The merger combines midstream energy infrastructure with water management solutions, potentially creating a more integrated service offering in key energy production regions. This aligns with broader industry trends towards optimizing operational efficiency and sustainability in energy production.

Stakeholder Impact

• Shareholders (Aris): Will receive WES Common Units, cash, or a combination, based on their election, subject to proration for cash elections. Those who elected cash will receive less cash and more WES units than desired.
• Shareholders (WES): Will see dilution from the issuance of approximately 26.6 million new WES Common Units.
• Customers: The combined entity may offer a more integrated suite of services, potentially enhancing operational efficiency for customers in the Permian Basin and other operating areas.
• Employees: Risks related to retention of key personnel and potential integration challenges are noted.

Next Steps

• Completion of guaranteed delivery procedures for election results.
• Determination of final certified election results shortly before closing.
• Calculation of final Merger Consideration and its allocation.
• Aris's securityholders' special meeting on October 14, 2025, to consider the Transaction.

Key Dates

Recommendation

The filing provides an update on the merger consideration election, which is a procedural step in an already announced acquisition. While the proration of cash consideration might cause some short-term volatility for Aris shareholders who preferred cash, the overall transaction is proceeding as expected. For WES, the issuance of new units will lead to dilution, but the strategic rationale for the merger remains unchanged. Investors should hold their positions pending the finalization of the merger and further details on the combined entity's operational and financial outlook. The information does not present a significant new catalyst for a strong buy or sell recommendation beyond the existing merger arbitrage considerations.

Keywords

Western Midstream Partners, WES, Aris Water Solutions, ARIS, Merger, Acquisition, SEC Filing, Form 425, Merger Consideration, Election Results, Common Units, Cash Consideration, Proration, Midstream, Water Solutions, Permian Basin