Energy Transfer Equity, Williams will remain separate companies
Energy Transfer Equity is buying pipeline operator The Williams Cos. for approximately $32.61 billion, creating one of the five biggest energy companies in the world.
Energy Transfer Equity LP announced Monday it will pay $43.50 per share, a 4.6 per cent premium to Williams’ Friday closing price of $41.60. Williams’ shareholders can choose shares of Energy Transfer Equity affiliate Energy Transfer Corp., cash or a combination of both.
The companies put the deal’s value at about $37.7 billion, including debt and other liabilities.
“Williams’ intense focus on connecting the best natural gas supplies to the best natural gas markets will be a significant complement to the ETE family of diverse energy infrastructure,” said Alan Armstrong, Williams CEO.
“As a combined company, we will have enhanced prospects for growth, be better able to connect our customers to more diverse markets, and have more stability in an environment of low commodity prices.”
Williams’ stockholders will also receive a one-time special dividend of 10 cents per share that will be paid immediately before the acquisition closes.
Williams Cos. previously announced a deal to acquire Williams Partners LP, but that transaction has been terminated. Williams agreed to pay a $428 million termination fee to Williams Partners.
In the deal with Energy Transfer Equity, Williams will keep its company name and remain headquartered in Tulsa, Oklahoma.
Both companies’ boards approved the deal, which is expected to close in the first half of 2016. It still needs approval from Williams’ shareholders.
“After a comprehensive evaluation of strategic alternatives, including extensive discussions with numerous parties, the Williams Board of Directors concluded that a merger with Energy Transfer Equity is in the best interests of Williams’ stockholders and all of our other stakeholders,” said Frank T. MacInnis, chairman of the Williams board.
Shares of Williams Cos. fell $3.27, or 7.9 per cent, to $38.33 in morning trading Monday, while Energy Transfer shares lost $2.24, or 9.6 per cent, to $21.