Energy Transfer Equity said Wednesday that it has walked away from its attempt to acquire the Williams Companies.
The move comes after the Delaware Court of Chancery found last week that ETE is contractually entitled to terminate the merger agreement with Williams.
The court found that ETE was contractually entitled to terminate the agreement after the company’s outside tax counsel, Latham & Watkins, was unable to deliver a required tax opinion prior to the outside merger date included in the agreement.
ETE said that Latham advised the company that it was unable to deliver the opinion as of the outside date on June 28.
When the firm’s counsel was unable to deliver the tax opinion, ETE said it provided written notice terminating the merger agreement due to a failure to meet the agreement’s conditions..
Williams has appealed the decision to the Delaware Supreme Court.
A court date for the appeal has not been disclosed yet.
Oklahoma-based Williams said Wednesday that it does not believe that ETE had a right to terminate the merger.
“Williams recognizes the practical fact that ETE has refused to close the merger. Williams has concluded that it is in the best interests of its stockholders to seek, among other remedies, monetary damages from ETE for its breaches,” Williams said.
Williams added that it will renew its focus on “on connecting the best natural gas supplies to the best markets.”
The U.S. Federal Trade Commission had cleared the proposed acquisition earlier this month.
ETE announced last September that it would combine with Williams in a transaction worth $37.7 billion, including the assumption of debt and other liabilities.
However, the acquisition process was fraught with legal battles.
Williams filed three lawsuits against ETE during the course of the attempted combination.
The most recent lawsuit, filed in May, sought to prevent ETE from terminating the agreement.
In the lawsuit, Williams alleged that ETE had breached the merger agreement “through a pattern of delay and obstruction designed to allow ETE to avoid its contractual commitments.”