Williams’ $10.5 Billion Acquisition of All Public Equity of Williams Partners L.P.

Morgan Stanley & Co. LLC and Gibson, Dunn & Crutcher LLP and Davis Polk & Wardwell LLP acted as financial and legal advisors, respectively, to Williams. Evercore and Baker Botts L.L.P. acted as financial and legal advisors, respectively, to the Conflicts Committee of Williams Partners.

Williams (NYSE: WMB) and Williams Partners L.P. (NYSE: WPZ) entered in an agreement under which Williams will acquire all of the outstanding public common units of Williams Partners in an all stock-for-unit transaction at a 1.494 ratio of Williams common shares per unit of Williams Partners. The transaction is valued at $10.5 billion

Under the terms of the merger agreement, Williams will acquire all of the 256.0 million public outstanding units of Williams Partners at a fixed exchange ratio of 1.494 Williams shares for each public unit of Williams Partners (or a fixed exchange ratio of 1.513 if the closing does not occur before the record date for Williams’ dividend to be paid in the third quarter of 2018). In aggregate, assuming a 1.494 exchange ratio, Williams will issue approximately 382.5 million shares in connection with the proposed transaction, representing approximately 31.6 percent of the total shares outstanding of the combined entity. The transaction will be taxable to Williams Partners unitholders, and Williams will receive the tax benefits from the basis step-up; resulting in extending the period to which Williams is not expected to be a cash taxpayer through 2024.

Williams has reviewed the proposed transaction with the rating agencies and expects the combined entity will have investment grade credit ratings consistent with Williams Partners’ current ratings.

The merger is expected to close in the fall of 2018 subject to standard closing conditions, including the requisite approval of Williams shareholders. Following consummation of the merger, Williams Partners will become a wholly owned subsidiary of Williams.

The board of the general partner delegated to a conflicts committee consisting solely of independent directors the authority to review, evaluate and negotiate the transaction on behalf of Williams Partners and the public unitholders. The Williams Partners Conflicts Committee approved the transaction and recommended approval of the transaction to the board of directors of the general partner of Williams Partners. The transaction was approved by the boards of directors of both the general partner of Williams Partners and Williams.

Davis Polk advised Williamswith a team including corporate team includes partners Louis Goldberg (Picture) and Oliver Smith and associate Cheryl Chan. Partner Avishai Shachar and associates Elina Khodorkovsky and Andrew Imber are providing tax advice. Partner Andrew Ditchfield and associate Hannah B. Gerstenblatt are providing litigation advice.

Baker Botts represented the Conflicts Committee of Williams Partners L.P. with a team including Joshua Davidson, Travis Wofford, Jennifer Wu, Hayley Hervieux, Ty’Meka Reeves-Sobers (Corporate), Michael Bresson, Chuck Campbell (Tax) and Gregory Wagner (Regulatory).

 

Involved fees earner: Joshua Davidson – Baker Botts; Travis Wofford – Baker Botts; Jennifer Wu – Baker Botts; Hayley Hervieux – Baker Botts; Ty’Meka Reeves-Sobers – Baker Botts; Michael Bresson – Baker Botts; Chuck Campbell – Baker Botts; Gregory Wagner – Baker Botts; Louis Goldberg – Davis Polk & Wardwell; Oliver Smith – Davis Polk & Wardwell; Cheryl Chan – Davis Polk & Wardwell; Avishai Shachar – Davis Polk & Wardwell; Elina Khodorkovsky – Davis Polk & Wardwell; Andrew Imber – Davis Polk & Wardwell; Andrew Ditchfield – Davis Polk & Wardwell; Hannah Gerstenblatt – Davis Polk & Wardwell;

Law Firms: Baker Botts; Davis Polk & Wardwell;

Clients: Williams Partners L.P.; Williams Companies, Inc.;