Tulsa, OK-based Williams Cos. announced it will acquire the 40% of subsidiary Williams Partners it doesn’t already own through a unit share swap valued at about $13.8 billion. The transaction is expected to take place in the third quarter.
Williams Partners, the master limited partnership that holds Williams natural gas infrastructure assets, was set up in 2005. The partnership grew and was instrumental in raising investor money, which was used to acquire more assets from Williams Cos.
Williams officials said the acquisition reduces taxes and simplifies its corporate structure. The company said the move will not result in layoffs.
“This transaction simplifies our corporate structure, streamlines governance and positions Williams for strong investment-grade credit ratings,” said President and CEO Alan Armstrong. “We anticipate significant market valuation upside and lower cost of capital for new fee-based growth projects along with incremental growth through strategically aligned M&A activities.”
Williams Partners owns or operates 33,000 miles of natural gas and natural gas liquids pipelines.
In a similar move, Kinder Morgan announced consolidation of three master-limited partnerships to free up cash in August.