Williams Partners (WPZ)

[eastunder]

Williams Cos to acquire Williams Partners in all-stock deal

http://www.marketwatch.com/story/williams-cos-to-acquire-williams-partners-in-all-stock-deal-2015-05-13?siteid=yhoof2

By Angela Chen

Published: May 13, 2015 8:18 a.m. ET



Pipeline giant Williams Cos. agreed to acquire Williams Partners L.P. in an all-equity transaction that values the latter at about $33 billion.

“This transaction simplifies our corporate structure, streamlines governance and positions Williams for strong investment-grade credit ratings,” Williams Chief Executive Alan Armstrong said. He added that the deal would result in lower capital costs and “improved tax benefits.”

Under the deal, Williams WMB, +5.81% will swap 1.115 shares for each unit of Williams Partners WPZ, +23.52% , of which Williams Cos. already owns 58%. In the aggregate, Williams will issue 275.4 million shares, which is about 27% of the total shares of the combined company.

Based on Williams Cos. closing price Tuesday, the deal values Williams Partners at $55.86, or an 18% premium to where Williams Partners finished Tuesday.

Shares of Williams Partners jumped 23% to $58.50 in premarket trading, while shares of Williams Cos. increased 7.3% to $53.74. The Oklahoma-based Williams also raised its third-quarter dividend.

Williams in February completed the merger of two master-limited partnerships it controls--William Partners and Access Midstream Partners--into one giant natural-gas pipeline system under the Williams Partners name. Williams Partners, a major pipeline company based in Tulsa, Okla., has sought to increase its presence in shale formations where drillers are using new technologies to produce more oil and natural gas.