Summary
The Williams Companies, Inc. (WMB) has entered into a definitive agreement to sell its Kern River interstate natural gas pipeline business to a subsidiary of MidAmerican Energy Holdings Company, a Berkshire Hathaway Inc. affiliate. The transaction is valued at approximately $960 million, consisting of $450 million in cash and the assumption of $510 million in debt by the buyer. This divestiture is a strategic move expected to significantly reduce Williams' capital expenditure requirements by approximately $1.26 billion over the next 18 months. The sale, anticipated to close by March 31, 2002, is subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act and necessary bank consents. Investors should note that MidAmerican plans to continue with scheduled expansions of the Kern River system, which may offer insights into the future growth prospects of this segment under new ownership. The proceeds from the sale will be used to strengthen Williams' financial position.
Key Highlights
- 1Williams Companies (WMB) to sell its Kern River interstate natural gas pipeline business.
- 2Buyer is a unit of MidAmerican Energy Holdings Company, an affiliate of Berkshire Hathaway Inc.
- 3Transaction value is $450 million in cash plus assumption of $510 million in debt, totaling approximately $960 million.
- 4Sale is expected to close by March 31, 2002, subject to regulatory and bank approvals.
- 5Williams' capital expenditure requirements are projected to decrease by approximately $1.26 billion over the next 18 months.
- 6MidAmerican plans to continue with scheduled expansions of the Kern River system post-acquisition.