Williams Partners, Access Midstream in $50bn merger

Williams Cos. is proceeding with the merger of Williams Partners and Access Midstream Partners, in which it owns controlling interests, as it had proposed in June when it acquired Global Infrastructure Partners’ 50 percent general partner (GP) interest in Access Midstream.

Williams has revised the terms of the original agreement, however, which are “improved” for both Access Midstream and Williams Partners, the company said in a statement. Under the new terms, Williams Partners public unitholders will receive 0.86672 Access Midstream common units compared to the originally proposed exchange ratio of 0.85 common units.

The transaction, valued at around $50 billion, is expected to close in early 2015, with Williams targeting a closing date as early as January.

As a result of the merger, Williams Partners will be wholly owned by Access Midstream. The merged MLP will however be named Williams Partners, and according to the statement, will be one of the largest and fastest-growing MLPs with expected 2015 adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately $5 billion.

“This is another big step toward our goal of becoming the leading natural gas infrastructure provider in North America,” Williams’ chief executive Alan Armstrong said. “The combination of Access Midstream Partners’ intense focus on natural gas gathering with Williams Partners’ broader service offerings along the value chain is yielding even more robust growth opportunities.”

The merged MLP will feature large-scale positions across the midstream sector including natural gas pipelines, such as Transco, the largest and fastest-growing pipeline system in the US; gathering and processing facilities located in key shale and unconventional producing areas such as Marcellus, Utica and Eagle Ford; and natural gas liquids and petrochemical services.

Once the merger is complete, Williams will continue to own 100 percent of the GP interest and related incentive distribution rights and will continue to control the merged MLP. It will hold approximately 58.8 percent of the limited partner interest in the merged entity.

Upon the closing of the merger, Armstrong and Donald Chappel, currently chief financial officer of Williams and Williams Partners, will serve the merged MLP as its GP’s chief executive and chief financial officer, respectively.

Mike Stice, who currently serves as chief executive of Access Midstream’s GP, will continue in his role as a director of the GP of the merged MLP.

The new Williams Partners will be based in Tulsa, Oklahoma with offices in Oklahoma City, Houston, Pittsburgh, Salt Lake City and Calgary.

By merging its MLP with Access Midstream, Williams is moving ahead with its planned transition to a pure play GP holding company. To complete its transition, the energy infrastructure company plans to complete the drop-down of its remaining natural gas liquids and petrochemical services assets and projects by late 2014 or early 2015.