A Dallas-based company is set to complete the acquisition of one of Oklahoma's largest pipeline operators by the first quarter of 2016.
Energy Transfer Equity announced Monday that it will buy Tulsa's Williams Companies in a $37.7 billion deal.
The move will create the fifth-largest energy company in the world Williams Companies' net income fell 24 percent in the first six months of this year.
ETE actually made an offer three months ago for Williams Companies but it was rejected. The Journal Record’s Kirby Lee Davis reports that under the agreement, ETE affiliate Energy Transfer Corp LP will acquire Williams for $43.30 per share:
Stockholders may elect to receive a prorated cash amount and/or 1.8716 ETC common shares for each share of WMB stock. The ETC shares would be traded on the New York Stock Exchange under the symbol ETC. Williams Cos. stockholders also will be entitled to a special one-time dividend of 10 cents per WMB share, to be paid prior to closing. Energy Transfer projected immediate benefits to its cash flow and distributions upon closing, according to its press announcement Monday. Projected cost savings and anticipated commercial synergies exceeded expectations from early due diligence, officials said.
Williams owns more than 33,000 miles of pipeline in the U.S. and has about 7,000 employees. Some analysts say the takeover could have positive repercussions in the Tulsa community, according to Davis:
“It could be huge,” said Russell Evans, executive director of Oklahoma City University’s Economic Research and Policy Institute. “A situation like that could develop here where you have a very large and a very high-income, high-wage labor force that stays in Tulsa.” Under the agreement, Williams Cos. will consolidate its corporate operations into an affiliate of ETE. Oklahoma Historical Society Executive Director Bob Blackburn said that could leave a financial and leadership hole in Tulsa much like what Oklahoma City experienced after Anadarko Petroleum acquired Kerr-McGee in 2006. Tulsa could lose many of the city’s highest-paid executives and their active involvements and giving that supports city programs.
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