Under the terms of the transaction, all 247 million public outstanding units of Williams Partners will be acquired by Williams by issuing 275.4 million shares to the former’s shareholders..
The acquisition represents approximately 27% of the combined entity’s total shares outstanding. Williams already holds 60% stake in Williams Partners.
Williams president and CEO Alan Armstrong said: "The lower cost of capital and improved tax benefits expected from this transaction increase our confidence in extending the duration of our expected 10 percent to 15 percent dividend growth rate through 2020.
"This transaction simplifies our corporate structure, streamlines governance and positions Williams for strong investment-grade credit ratings.
"Our roster of large-scale, fully contracted infrastructure projects will drive extraordinary adjusted EBITDA growth from an expected $5.4 billion in 2016 to $6.8 billion in 2018."
Upon completion of the transaction in the third quarter of this year, the firms expect the combined unit to become one of the largest high-dividend-paying C-Corps in the energy sector.
Taxable to Williams Partners shareholders, the transaction will provide tax benefits to Williams from the asset step-up over 15 years.
Williams Partners operates across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petrochemical production of ethylene, propylene and other olefins.
The company owns and operates more than 33,000 miles of pipelines system wide in the US and Canada.
