Williams Companies Agrees $10.5 Billion Merger With Williams Partners
Big oil deal on Thursday.

Thursday deal alert.

Williams Companies Inc. (WMB) said Thursday that it had reached a deal to buy the remaining stake of Williams Partners LP (WPZ) in a deal valued at $10.5 billion that will simplify the corporate structure of the gas pipeline and infrastructure group.

Williams Companies said the all-stock deal would fold the 256 million outstanding shares of Williams Partners into the parent at a ratio of 1.494 Williams Co. shares for each partnership unit. Based on that ratio, the companies said, Williams Co. will issue 382.5 new shares in connection with the deal, which it nonetheless said would be immediately cash accretive and open shareholders to new dividends.

"This strategic transaction will provide immediate benefits to Williams and Williams Partners investors (and) also simplifies our corporate structure, streamlines governance and maintains investment-grade credit rating," said CEO Alan Armstrong. "We continue to see an expanding portfolio of projects to connect the best supplies of natural gas and natural gas products to the best markets."

"As a fast-growing, investment grade C-Corp with the best natural gas infrastructure assets in the sector, we are confident this combined entity will provide a compelling investment opportunity to a broader range of investors," he added.

Tulsa, Ok.-based Williams Companies shares were marked 3.03% higher in pre-market trading Thursday, indicating an opening bell price of $28.20, a move that would trim the stock's year-to-date decline to around 7.5%. 

Williams Companies said the overall value of the deal was tabbed at $10.5 billion and represents a 6.4% premium to the May 16 closing price of $38.42 each for Williams Partners, implying a price of $40.875 cents for each unit.

Williams said the deal was approved by both the boards of both companies and is expected to close in the autumn of this year. 

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