Oklahoma-based transportation firm Williams Companies agreed Monday to merge with Energy Transfer Equity in a deal worth $37.7 billion, including debt, after rejecting an unsolicited $53 billion offer in June.
Under the terms of the transaction, Energy Transfer Corp LP (ETC), an affiliate of Energy Transfer Equity, will acquire Williams at an implied current price of $43.50 per Williams share.
Williams’ stockholders will have be able to elect to receive either ETC common shares, that would be publicly traded on the NYSE under the symbol “ETC,” cash or a combination of both.
Williams stockholders electing to receive stock consideration will receive a fixed exchange ratio of 1.8716 ETC common shares for each share of Williams Companies (WMB) common stock, before giving effect to proration.
If all Williams’ stockholders elect to receive all cash or all stock, then each share of Williams common stock would receive $8.00 in cash and 1.5274 ETC common shares.
In addition, WMB stockholders will be entitled to a special one-time dividend of $0.10 per WMB share to be paid immediately prior to the closing of the transaction.
The special one-time dividend is in addition to the regularly scheduled WMB dividends to be paid before closing.
Dallas-based Energy Transfer Equity expects EBITDA from commercial synergies to exceed $2 billion per year by 2020, or more than 20 percent of the estimated current pro forma EBITDA for the combined company.
The company added the synergies “will require overall incremental capital investment of more than $5 billion to achieve.”
The merger will create one of the five largest energy firms in the world, USA Today noted.
Williams Companies rejected an unsolicited takeover bid with an implied value of $53.1 billion from Energy Transfer Equity in June, Reuters said.
As part of the merger, Williams Partners L.P. will retain its current name and remain a publicly traded partnership headquartered with a meaningful ongoing presence in Tulsa, Oklahoma.
“I am excited that we have now agreed to the terms of this merger with Williams. I believe that the combination of Williams and ETE will create substantial value for both companies’ stakeholders that would not be realized otherwise,” Energy Transfer Equity chairman Kelcy Warren said.