Summary
Williams Companies, Inc. (WMB) has announced a significant strategic transaction via an 8-K filing on June 16, 2014, detailing a purchase agreement to acquire substantial equity interests in Access Midstream Partners, L.P. (ACMP) and its general partner, Access Midstream Ventures, L.L.C. (AMV), from GIP entities for $5.995 billion. This move positions Williams to indirectly own 100 percent of the general partner of ACMP and approximately 50 percent of its limited partner units. This acquisition is a key step towards Williams' broader strategy, which includes a proposed merger of its subsidiary, Williams Partners L.P. (WPZ), with ACMP upon completion of the GIP purchase.
Key Highlights
- 1Williams Companies entered into a $5.995 billion purchase agreement to acquire significant stakes in Access Midstream Partners, L.P. (ACMP) and its general partner entities.
- 2The transaction will result in Williams indirectly controlling ACMP's general partner and owning approximately 50% of ACMP's limited partner units.
- 3The acquisition is a precursor to a proposed merger between Williams Partners L.P. (WPZ) and ACMP, structured as a unit-for-unit exchange.
- 4WPZ unitholders in the proposed merger will have an option to receive either a special cash payment or additional ACMP common units.
- 5The closing of the GIP purchase is anticipated in Q3 2014 and is not conditioned on the WPZ-ACMP merger.
- 6The filing also addresses updated dividend guidance and the impact of delays and costs at the Geismar olefins plant, including insurance recovery uncertainties.
Frequently Asked Questions
The main purpose of this 8-K filing is to announce Williams Companies' entry into a material definitive agreement to acquire significant equity interests in Access Midstream Partners, L.P. (ACMP) and its related entities, and to disclose information regarding a proposed merger between Williams Partners L.P. (WPZ) and ACMP.
The total consideration for the acquisition of the specified interests in ACMP and its general partner entities is $5.995 billion, subject to certain adjustments based on distributions and time until closing.
Williams Companies proposes to merge its subsidiary, WPZ, with and into ACMP following the closing of the GIP purchase. This merger would be a unit-for-unit exchange, with ACMP acquiring all outstanding WPZ units.
The filing notes that Williams Partners L.P. (WPZ) is lowering its 2014 financial guidance due to additional delays and increased construction spending at its Geismar, Louisiana olefins plant. There are also risks associated with recovering $500 million in insurance proceeds related to a 2013 explosion and fire at the same plant.