Energy Transfer Equity To Combine With Williams In $37.7 Bln Transaction

(RTTNews) - Energy Transfer Equity, L.P. or ETE (ETE) and The Williams Companies, Inc. or WMB (WMB) Monday announced a business combination transaction valued at about $37.7 billion, including the assumption of debt and other liabilities.

The announcement followed the termination of the previously agreed merger agreement between WMB and Williams Partners L.P. or WPZ.

The transaction is immediately accretive to cash flow and distributions for both ETE and WMB.

ETE expects that the anticipated EBITDA from commercial synergies will exceed $2 billion per year by 2020 and will require overall incremental capital investment of more than $5 billion to achieve.

The business combination between ETE and WMB was approved by the Boards of Directors of both entities. The combination will create the third largest energy franchise in North America and one of the five largest global energy companies.

The combination will also benefit customers by enabling further investments in capital projects and efficiencies that would not be achievable without the transaction.

Under the terms of the transaction, Energy Transfer Corp LP or ETC, an affiliate of ETE, will acquire Williams at an implied current price of $43.50 per Williams share. Williams' stockholders will have the right to elect to receive as merger consideration either ETC common shares and / or cash.

WMB stockholders will be entitled to a special one-time dividend of $0.10 per WMB share to be paid immediately before the closing of the transaction. The special one-time dividend is in addition to the regularly scheduled WMB dividends to be paid before closing.

As part of the merger, WPZ will retain its current name and remain a publicly traded partnership headquartered with a meaningful ongoing presence in Tulsa, Oklahoma. Also as a result of this merger, WMB and WPZ withdrew their financial guidance.

Separately, WPZ announced an agreement with WMB, the owner of Williams Partners' general partner, whereby both parties terminated their previously announced merger agreement under which Williams was to acquire all of the public outstanding common units of Williams Partners in an all stock-for-unit transaction. Williams has agreed to pay a termination fee of $428 million to Williams Partners.