What is the main purpose of this 8-K filing?

This 8-K filing announces that The Williams Companies, Inc. (WMB) has entered into a material definitive agreement to merge Williams Partners L.P. (WPZ) into a wholly owned subsidiary of WMB. This is essentially a move by WMB to acquire the remaining publicly held units of WPZ and simplify its corporate structure.

How will WPZ unitholders be compensated in this merger?

WPZ public unitholders will receive shares of WMB common stock. The initial exchange ratio is 1.494 shares of WMB common stock for each WPZ common unit. This ratio may adjust to 1.513 shares if the record date for WMB's regular quarterly cash dividend for the quarter ending September 30, 2018, occurs before the merger closes.

What approvals are needed for this merger to be completed?

The merger requires several approvals, including: approval by holders of at least a majority of the outstanding WPZ common units; effectiveness of a registration statement for the WMB stock issuance; approval of the listing of WMB common stock on the NYSE; approval of the stock issuance by a majority of the voting power present at a WMB stockholder meeting; and approval of a charter amendment by a majority of the outstanding shares of WMB common stock.

Are there any penalties if the merger agreement is terminated?

Yes, the merger agreement contains provisions for termination by either party under specific circumstances. If the merger is terminated under certain conditions, WMB may be required to pay WPZ a termination fee of up to $410 million, or reimburse WPZ for transaction expenses not to exceed $10 million.

WMB 8-K: Material Agreements & Regulation FD

Summary

The Williams Companies, Inc. (WMB) has filed an 8-K report detailing a material definitive agreement to merge its wholly owned subsidiary, SCMS LLC, with Williams Partners L.P. (WPZ). This merger, structured as a "reverse split-off," will result in WPZ surviving as a subsidiary of WMB, with WPZ public unitholders receiving WMB common stock. The exchange ratio is set at 1.494 shares of WMB common stock per WPZ common unit, with a potential adjustment to 1.513 shares if WMB's quarterly dividend record date in Q3 2018 occurs before the merger's closing. This move signifies WMB's intent to simplify its corporate structure by fully consolidating WPZ. The transaction has received approval from the WMB Board of Directors and the WPZ Conflicts Committee, with further approvals required from WMB stockholders for a charter amendment and stock issuance, and from WPZ unitholders. The agreement includes customary representations, warranties, and covenants, with termination clauses and potential termination fees for both parties, capping at $410 million payable by WMB under certain circumstances. The filing also announces the release of a joint press release with WPZ regarding this agreement.

Key Highlights

1Williams Companies (WMB) to acquire remaining publicly held units of Williams Partners L.P. (WPZ) through a merger.
2WPZ public unitholders will receive 1.494 shares of WMB common stock per WPZ common unit (or 1.513 shares under specific dividend timing conditions).
3The transaction is structured as a merger of WMB's subsidiary SCMS LLC with WPZ, with WPZ surviving as a WMB subsidiary.
4WMB's Board of Directors has approved the merger, deeming it in the best interest of WMB stockholders.
5WPZ's Conflicts Committee has unanimously approved the merger, deeming it in the best interest of WPZ and its public unitholders.
6Completion of the merger is subject to various conditions, including WMB stockholder approval for a charter amendment and stock issuance, and WPZ unitholder approval.
7The merger agreement includes termination provisions and potential termination fees, with WMB potentially paying up to $410 million.

WILLIAMS COMPANIES, INC. 8-K Report, Material Agreement (May 17, 2018)

Summary

Key Highlights

Frequently Asked Questions