US oil pipeline giant Energy Transfer to buy rival Williams Cos for $33 bn

US oil pipeline giant Energy Transfer Equity LP yesterday struck a mega deal to buy rival Williams Cos Inc for around $33 billion.

The offer price is way less than the $53.3 billion Williams had rejected from Energy Transfer in June for being too low.

Energy Transfer has offered to pay $43.50 a share.  Williams' stockholders will have the option to receive either Energy Transfer common shares or cash.

Energy Transfer will take on $4.2 billion in William's liabilities and issue $6 billion in new debt to finance the transaction.

In June, Williams had rejected a $53.3 billion (including debt) offer from Energy Transfer. But since then shares of energy companies have sunk by a third due to decline in global energy prices.

Frank MacInnis, chairman of the Williams said, ''After a comprehensive evaluation of strategic alternatives, including extensive discussions with numerous parties, the Williams Board of Directors concluded that a merger with Energy Transfer Equity is in the best interests of Williams' stockholders and all of our other stakeholders. The merger provides Williams stockholders with compelling value today as well as the opportunity to benefit from enhanced growth projects.''

Williams is a provider of large-scale infrastructure connecting North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks.

Based in Oklahoma, Williams owns around 60 per cent of Williams Partners L.P., including all of the 2 per cent general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins.

Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation's largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. Williams Partners' operations touch approximately 30 per cent of US natural gas.

Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the US. Its subsidiaries include Panhandle Eastern Pipe Line Company  and Lone Star NGL, which owns and operates natural gas liquids storage, fractionation and transportation assets. 

Energy Transfer owns and operates approximately 71,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines.