Williams Cos. (WMB - Get Report) said Sunday, Oct. 26, that its master limited partnerships Williams Partners LP (WPZ) and Access Midstream Partners (ACMP) sweetened the terms of their merger, valuing the transaction at $50 billion.

Williams Partners unitholders will get 0.86672 of an Access unit for each unit they hold, up from 0.85 plus 81 cents per unit in cash or more Access units than in the June proposal. Access unitholders will also get 0.06152 more units for each one they hold, or 6.3 million in total valued at $3.74 per unit, or $381 million.

Williams Cos., the natural gas company based in Tulsa, Okla., also agreed to cut the exchange ratio it will receive from the deal to offset the $3.74 per unit of value Access unitholders are getting.

Williams Cos. will end up with more 251.5 million Access units representing an exchange rate of 0.8208, giving it 353.3 million units, or 58.8% of the limited partner interest, versus 306.4 million Williams Partners units and 101.8 million Access units previously. Williams Cos. is getting 8.9 million fewer Access units worth $544 million than in the June proposal but will continue to own 100% of the general partner and related incentive distribution rights and control the merged MLP.

Simmons & Co. International said the exchange ratio represents a 5.5% premium for Williams Partners units, although Access units pay a lower annualized distribution of $2.38 per unit versus $3.71 for Williams Partners.

Williams Cos. initially proposed the merger on June 15 when it announced that it had acquired Access units and general partner interests owned by Global Infrastructure Partners for $5.99 billion. That deal came together only a few months after Williams Cos. agreed to give activists Keith Meister of Corvex Management LP and Eric Mandelblatt of Soroban Capital Partners LLC board seats in exchange for the hedge funds dropping a potential proxy fight. The activists had pushed for Williams to look into strategic combinations.

Williams Cos. owns controlling interests in the two MLPs, which together are expected to be one of the largest and fastest growing MLPs generating $5 billion in Ebitda next year and "industry-leading" 10% to 12% distribution growth through 2007, Williams Cos. said.

Williams Cos. expects to close the deal in early 2015, hopefully in January.

Analysts at Tudor, Pickering, Holt & Co. Securities called the new deal a "significant positive" for Williams Cos. and Williams Partners, as the lengthy talks with Access concluded without diluting either of them.

"We saw no risk of deal falling through, but [the] market beat up WMB [and] WPZ as speculated Q3 timing dragged into Q4," they said. "With overhang gone, we see WPZ becoming a top-performing MLP in the next twelve months."

The merger follows a series of large MLP transactions as part of a consolidation of a proliferating industry due to the tax advantages of the investment vehicles.

In August, Kinder Morgan Inc. (KMI - Get Report) said it would be bringing all of its publicly traded master limited partnerships back under one roof in a cash and stock deal valued at $70 billion.

In the past month, QEP Resources Inc. (QEP - Get Report) has agreed to sell its midstream business to Tesoro Logistics LP (TLLP) for $2.5 billion in cash, Enterprise Products Partners LP (EPD - Get Report) agreed to purchase Oiltanking Partners LP (OILT) from Oiltanking GmbH's Oiltanking Holding Americans Inc. for $6 billion and Atlas Energy LP (ATLS) and Atlas Pipeline Partners LP APL agreed to be sold to Targa Resources Corp. (TRGP - Get Report) and Targa Resources Partners LP (NGLS) for $7.7 billion.

Williams Co. CEO Alan Armstrong said in a statement that the transaction is another big step toward its goal of becoming the leading natural gas infrastructure provider in North America.

"The combination of Access Midstream Partners' intense focus on natural gas gathering with Williams Partners' broader service offerings along the value chain is yielding even more robust growth opportunities," he said. "This transaction advances our strategy to connect the best supplies to the best markets by allowing us to provide even more service and market options for our customers."

Williams Cos. said distribution coverage is expected to be at or above 1.1 times or $1.1 billion through 2017, with cash distributions for 2015 of $3.65 per limited partner unit, up 50% over Access' 2014 guidance and 30% over its 2015 guidance.

The merged MLP expects to pay a regular cash distribution in the first quarter of 2015 of 85 cents per unit, up 53% over the Access distribution paid in the first quarter of 2014.

Access CEO Mike Stice said in a statement that Access and Williams Partners are experiencing robust growth and it expects customers to benefit from the expanded organizational capability and enhanced national scale. "We're already seeing employees benefit from opportunities for advancement and from the additional benefits of being a member of the larger Williams family," he said.

Stice will continue as a director of the general partner of the merged MLP but will retire as an officer. Robert Purgason, COO of Access' general partner, is expected to join Williams as senior vice president overseeing Access' operations, reporting to Armstrong, and will be one of its general partner's senior vice presidents, rather than COO. David Shiels, CFO of Access' general partner, will leave the company to pursue other opportunities after the merger closes. Armstrong will be CEO of Williams Cos. and Williams Partners and CFO Donald Chappel will be CFO of the merged MLP

The merged MLP will own the Transco, Northwest and Gulfstream interstate natural gas pipelines, gathering and processing in the Marcellus, Utica, Piceance, Four Corners, Wyoming, Eagle Ford, Haynesville, Barnett, Mid-continent and Niobrara areas and oil and natural gas gathering services in the deepwater Gulf of Mexico and ownstream assets on the Gulf Coast and in western Canada.

Williams Cos. said the merger terms were negotiated, reviewed and approved by the conflicts committees of the boards of each partnership's general partner. A majority of Williams Partners units must approve the deal, but Williams Cos. unit Williams Gas Pipeline Co. LLC already owns enough units to approve the deal for all unitholders.

Williams Partners will become wholly owned by Access, but the merged MLP will be named Williams Partners LP.

Williams Cos. also announced it increased its third quarter 2014 dividend by 32% to $0.56, or $2.24 on an annualized basis, resulting from the purchase of a controlling stake in Access in June and its decision to accelerate its planned shift to a pure play general partner holding company.

Williams also affirmed dividend growth guidance of 15% per year paying $1.96 in 2014, $2.46 in 2015, $2.82 in 2016 and $3.25 in 2017. Williams expects excess cash flow available after dividends of more than $300 million in 2015 and 2016.

To complete its transition to a pure-play general partner holding company, Williams plans to complete the drop-down of its NGL & Petchem Services unit by late 2014 or early 2015. It expects to have invested $600 million in the assets by year-end. The drop-down must clear Williams Partners' board conflicts committee and Williams plans to use the proceeds to repay revolver borrowings and for general corporate purposes.

Williams Cos. received advice from UBS Investment Bank's Carlos Rivero, Rob Pierce and Noah Keys, Barclays' Gary Posternack, Barbara Byrne and Michael Cormier and Citi's Michael Casey and Claudio Sauer. Gibson, Dunn & Crutcher LLP provided legal advice with a team led by Steven Talley.

Robert W. Baird & Co. Inc.'s Curtis Goot and Baker Botts LLP's Josh Davidson and Tull Florey assisted Williams Partners' conflicts committeee. Evercore's Rob Pacha and Ray Strong and Richards, Layton & Finger PA's Srinivas Raju and Greg Ladner advised Access' conflicts committee.

Latham & Watkins LLP advised Access, including Ryan Maierson, Thom Brandt, Carolyn Check, Sara-Ashley Hernandez, Matthew Olson, Sam Rettew, Ben Wiegand, Regina Schlatter, Tim Fenn, Bryant Lee, Joel Mack, Alicia Handy, David Langer, Ken Simon, William Flynn, David Taub, Julie Crisp, Lilly Fang, David Barrett and James Barrett.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.