Energy Transfer to take over Williams for 37.7 billion U.S. dollars

Williams Cos. announced Monday it has agreed to be acquired by Energy Transfer Equity in a cash-and-stock, debt-inclusive deal worth about 37.7 billion U.S. dollars.

The combination will create the third largest energy franchise in North America and one of the five largest global energy companies, the Oklahoma-based Williams said in a statement.

Both Williams and the Texas-based Energy Transfer Equity have strong presences of natural gas and liquids pipelines and plants in North America.

Energy Transfer operates about 113,600 km of natural gas and crude pipelines across Texas, the Gulf Coast and the Midwest, while about 52,800 km of pipelines operated by Williams stretches mostly in Northeast including the better-known 861,696 km Transco pipeline, the largest U.S. gas pipeline system that runs from South Texas to New York City, according to local daily The Houston Chronicle.

The new company is expected to meet about a third of rising U.S. natural gas demand.

The acquisition is expected to allow the new company to better cope with dipping energy prices which have been affecting both companies' stock.

Under the pact, Williams investors will get 43.50 dollars a share in cash or stock or a combination of both, according to the statement. The share price is a 4.6 percent premium to Williams' Friday closing price of 41.60 dollars.

The pact was reached following negotiations between the two companies that began in May and William's subsequent rejection of Energy Transfer's initial offer of 64 dollars a share in June.

The energy deal is the second-largest this year, behind Royal Dutch Shell's 70 billion dollars acquisition of natural gas producer BG Group in April. Enditem