425: Western Midstream, Aris Set Merger Election Deadline

Western Midstream Partners and Aris Water Solutions announce the election deadline for merger consideration and the expiration of the HSR Act waiting period for their pending acquisition.

Summary

• The deadline for Aris securityholders to elect their form of merger consideration 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 approval from Aris stockholders and other customary closing conditions.
• Aris securityholders can elect to receive 0.625 WES Common Units, a combination of $7.00 in cash and 0.450 WES Common Units, or $25.00 in cash.
• The cash election consideration is subject to proration, ensuring the total cash paid in the Transaction does not exceed $415.0 million.
• Securityholders who do not submit a valid election form by the deadline will be deemed to have elected the Common Unit Election Consideration.
• The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired on September 26, 2025, satisfying a key condition for the Transaction's completion.

Sentiment

Score: 7

Explanation: The announcement confirms the expiration of a significant regulatory waiting period (HSR Act) and sets a clear timeline for shareholder elections and the expected closing date, indicating the merger is progressing as planned and on track for completion.

Positives

• The expiration of the Hart-Scott-Rodino Act waiting period on September 26, 2025, satisfies an important regulatory condition for the Transaction.
• The expected closing date of October 15, 2025, indicates the merger is progressing as planned and on schedule.

Risks

• The expected timing and likelihood of completing the Transaction, including the timing, receipt, and terms of required governmental and regulatory approvals, could reduce anticipated benefits or cause the parties to abandon the Transaction.
• The ability to successfully integrate the businesses of Western Midstream and Aris Water Solutions may face challenges.
• The occurrence of any event, change, or other circumstances could give rise to the termination of the Merger Agreement.
• Aris stockholders may not approve the Merger Agreement.
• The parties may be unable to satisfy the conditions to the Transaction in a timely manner or at all.
• Management time may be disrupted from ongoing business operations due to the Transaction.
• Announcements relating to the Transaction could have adverse effects on the market price of WES Common Units or Aris Class A common stock.
• The Transaction and its announcement could adversely affect the ability of WES and Aris to retain customers, hire key personnel, and maintain relationships with suppliers and customers, impacting operating results and businesses generally.
• The pending Transaction could distract management of both entities and result in substantial costs.
• Problems may arise in successfully integrating the businesses, potentially leading to the combined company not operating as effectively and efficiently as expected.
• The combined company may be unable to achieve anticipated synergies, or it may take longer than expected to achieve them.

Future Outlook

The Transaction is expected to close on October 15, 2025, subject to Aris stockholder approval and other customary closing conditions. The expiration of the HSR waiting period satisfies a key condition, indicating positive progress towards the completion of the merger.

Industry Context

Western Midstream operates in the midstream energy sector, focusing on natural gas, NGLs, and crude oil gathering, processing, and transportation, along with produced water disposal. Aris Water Solutions specializes in environmental infrastructure and full-cycle water handling and recycling for energy companies, particularly in the Permian Basin. This merger represents a strategic move to integrate midstream energy services with specialized water management solutions, potentially enhancing operational efficiencies and sustainability offerings for energy producers, especially within the critical Permian Basin region. This aligns with broader industry trends emphasizing integrated services and environmental responsibility.

Stakeholder Impact

• Shareholders of Aris Water Solutions will need to make an election regarding the form of consideration they wish to receive (cash, WES common units, or a combination), with potential proration for cash elections.
• Shareholders of Western Midstream Partners will see an increase in outstanding common units and the strategic expansion of the company's service offerings into water solutions.
• Customers of both companies, particularly in the Permian Basin, may benefit from a more integrated service offering combining midstream infrastructure with water management and recycling solutions.
• Employees of both companies may experience integration processes post-merger, which could lead to changes in roles or organizational structure, though specific details are not provided.

Next Steps

• Aris securityholders must deliver properly completed Election Forms to the Exchange Agent by October 7, 2025, 5:00 p.m. New York time.
• Aris securityholders will vote on the merger proposal at a special meeting on October 14, 2025.
• The Transaction is expected to close on October 15, 2025, subject to Aris stockholder approval and other customary closing conditions.

Key Dates

Recommendation

This filing provides a procedural update on an ongoing merger, confirming the expiration of a key regulatory waiting period and setting a definitive timeline for shareholder elections and expected closing. It does not introduce new financial performance data or significant strategic shifts that would fundamentally alter the investment thesis for either WES or ARIS. For existing investors, a 'hold' recommendation is appropriate as the transaction is progressing as expected. Aris shareholders should carefully evaluate their election options based on their individual investment objectives and tax considerations.

Keywords

Western Midstream Partners, Aris Water Solutions, Merger, Acquisition, Midstream, Water Solutions, Hart-Scott-Rodino, HSR, Election Deadline, Merger Consideration, Common Units, Cash Election, Permian Basin