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Energy Transfer Equity to Acquire Williams Cos. in a $37.7B Deal

Energy Transfer Equity LP (ETE) is buying pipeline operator Williams Companies Inc. (WMB) in a transaction valued at about $37.7 billion, including the assumption of debt and other liabilities. The deal will create the third largest energy franchise in North America and one of the five largest global energy companies. In June, Williams rejected an unsolicited buyout offer from Energy Transfer for $64 per share, or $48 billion. Under the terms of the transaction announced Monday, Energy Transfer Corp LP, an affiliate of Energy Transfer Equity, will purchase Williams at an implied current price of $43.50 per Williams share. The deal comes at the same exchange ratio as initially offered of 1.8716 per share but now Williams shareholders can receive either stock or cash or a combination up to $6.05 billion in cash, or 20% of the total consideration. Williams shareholders will also be entitled to a special one-time dividend of 10 cents per share right before the deal closes on top of the regular dividend. If Williams shareholders choose to receive all cash or all ETC shares, then each share would receive $8 in cash and 1.5274 ETC shares as a result of proration.

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