Summary
Williams Companies, Inc. (WMB) filed an 8-K on March 19, 2012, reporting a material definitive agreement. The primary event is that Williams Partners L.P. (an indirect subsidiary) is acquiring all of the limited liability company interests of Caiman Eastern Midstream, LLC, a gathering and processing business, for $2.5 billion. This acquisition significantly expands WMB's midstream footprint in key Appalachian Basin areas (northern West Virginia, southwestern Pennsylvania, and eastern Ohio). The transaction is structured with a combination of cash ($1.78 billion) and restricted common units of Williams Partners L.P. ($720 million). Additionally, Williams Companies, Inc. intends to purchase up to $1.0 billion of the Partnership's common units. The filing also announced an update to financial guidance for 2012-2014 and a planned increase in dividends for the upcoming fiscal years, signaling confidence in future performance and a commitment to returning capital to shareholders.
Key Highlights
- 1Williams Partners L.P. to acquire Caiman Eastern Midstream, LLC for $2.5 billion.
- 2Acquisition expands WMB's midstream presence in the Marcellus and Utica shale regions.
- 3Transaction financed by $1.78 billion cash and $720 million in Williams Partners L.P. common units.
- 4Williams Companies, Inc. plans to invest up to $1.0 billion in the Partnership's common units.
- 5Updated financial guidance provided for 2012-2013, with initial guidance for 2014.
- 6Planned dividend increases announced for fiscal years 2012, 2013, and 2014.