Energy Transfer and Williams Cos. to Merge in $32.6 Billion Deal
September 28 2015 - 7:30AM
Dow Jones News
Williams Cos. agreed to be acquired by an Energy Transfer Equity
LP affiliate in a deal that values Williams at roughly $32.6
billion, expected to create one of the biggest energy companies in
the world.
Under the deal, Williams holders would receive roughly $43.50
per share held, or 1.8716 shares of ETE affiliate Energy Transfer
Corp. per Williams share held. If Williams holders chose to receive
more than an aggregate of $6.05 billion cash, the deal would be
subject to proration.
Including debt and other liabilities, the deal is valued at
about $37.7 billion.
If all of Williams' stockholders elect to receive all cash or
all stock, then each share of Williams common stock would receive
$8 a share in cash and 1.5274 ETC common shares.
Williams holders also would be eligible to a one-time special
dividend of 10 cents per share held.
The deal was approved by both companies' boards.
Energy Transfer, a Dallas-based pipeline company, had been
pursuing Williams for six months before Williams spurned its
unsolicited offer, valued at $48 billion or $53.1 billion including
debt and other liabilities, in June. Williams said at the time that
the offer significantly undervalued the company, setting the stage
for a potential bidding contest.
Williams Chairman Frank T. MacInnis on Monday said that after an
evaluation of the company's alternatives, the board concluded the
deal with Energy Transfer is in the best interest of the company's
stakeholders.
Shares of energy companies have been slammed of late amid a drop
in oil prices, with Williams and Energy Transfer shares both
declining more than 25% in the past three months. A downturn in
commodities prices has had stronger companies across the
industry—including exploration and drilling companies—eyeing rivals
as potential acquisition targets.
Geographically, a deal with Williams gives Energy Transfer an
expanded geographic footprint. Williams has significant fuel-moving
capabilities in the northeastern U.S., while most of Energy
Transfer's pipelines are located across the south and Midwest.
Williams and Energy Transfer already have a contentious history.
In 2011, Energy Transfer agreed to buy pipeline operator Southern
Union Co. for $4.2 billion when Williams swooped in and offered
$4.9 billion. Ultimately, Energy Transfer paid $5.7 billion to win
the deal.
Williams also terminated its deal to acquire pipeline affiliate
Williams Partners LP, which will remain a publicly traded master
limited partnership.
Energy Transfer Equity is a master limited partnership that owns
the general partner and 100% of the incentive distribution rights
of Energy Transfer Partners LP and Sunoco LP.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 08:15 ET (12:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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