US-based pipeline company Energy Transfer Equity (ETE) has terminated its proposed $37.7bn merger agreement with the interstate gas pipeline operator Williams Companies.
The termination follows opinion finding of Delaware Court of Chancery that ETE is contractually entitled to cease the agreement with Williams.
Delaware Court of Chancery ruled that ETE’s counsel Latham & Watkins could not deliver a required tax opinion prior to the 28 June 2016, exceeding the date as greed in the merger deal.
As per the rights and obligations reached under the agreement, ETE provided written notice terminating the merger agreement due to failure of conditions.
However, Williams said it does not believe ETE has a right to terminate the merger agreement as it has breached the agreement by failing to cooperate and use necessary efforts to satisfy the conditions to closing.
It has appealed the decision by the Delaware Court of Chancery to the Delaware Supreme Court.
Williams said in a statement: "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."
The agreement was signed in September last year to create the third largest energy firm in North America and one of the largest global energy companies.
Williams owns about 60% of Williams Partners, which has 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.