Energy Transfer to Buy Williams Cos. After Yearlong Pursuit
Energy Transfer Equity LP said it will buy Williams Cos. for roughly $32.6 billion, reaching a deal to create an energy-moving giant after a nearly yearlong pursuit of the rival pipeline operator.
In light of the agreement, Williams also terminated its deal to acquire pipeline affiliate Williams Partners LP, which will remain a publicly traded master limited partnership.
Energy Transfer, a Dallas-based pipeline company, had been pursuing Williams for six months before Williams in June spurned its unsolicited offer, valued at $48 billion or $53.1 billion including debt and other liabilities. Williams said at the time that the offer significantly undervalued the company, setting the stage for a potential bidding contest.
On Monday, Williams Chairman Frank T. MacInnis said that after evaluating the company’s alternatives, the board decided the deal with Energy Transfer was the best option for the company’s stakeholders.
Shares of energy companies have been slammed amid a drop in energy prices, with Williams and Energy Transfer shares both declining more than 25% in the past three months. The downturn in prices has left stronger companies across the industry—including exploration and drilling companies—eyeing rivals as potential acquisition targets.
The Energy Transfer-Williams deal will create one of the five largest energy companies in the world, the companies say. But since there is little overlap between the two companies’ networks, analysts have predicted that federal regulators would probably approve a merger of the two.