Boston, MA 06/17/2014 (wallstreetpr) – Williams Partners L.P (NYSE:WPZ) has confirmed reports that it is set to acquire Midstream Partners for $5.99 billion as the company gears up to expand its operation in the natural gas industry. The deal is expected to give the fourth largest pipeline company in America based on market capitalization, control over the largest gathering and processing.
Creation of MLP worth $100 Billion
Subsequent merger of Williams MLP, Williams Partners LP, and Access if successful will create one of the largest MLPs in enterprise value of about $100 billion. MLP’s continue to be extremely popular among investors looking for higher yields even though they have weaker corporate governance standards compared to corporations. Williams has for some time been looking to take a huge stake in Access after spending $2.4 billion on a joint venture with Global infrastructure venture in 2012.
Under the agreed agreement, Williams will acquire 50% stake that it does not own in the controlling entity of Access. Williams will acquire 55.1 million shares in Access expected to boost its share of Access units to 50% from 23%. Williams plans to pay for the deal with equity, debt and cash on hand. Access formerly known as midstream provides natural gas gathering, as well as storage for about 8 million acres in production.
Second Transaction
Williams in a second transaction which has not been mutually agreed by the two sides has prompted the formation of a committee that looks to address Williams’s proposal to merge Williams Partners LP and Access. Under this transaction, Access is to acquire Williams Partners unit for unit at a ratio of 0.85. The Proposal also involves an option of Williams Partners unit-holders taking either one-time special payment of $0.81 per unit to act as compensation for lower expected per unit cash distribution.
Williams Partners L.P (NYSE:WPZ) has also announced plans to increase its third quarter dividend by 32% to 56 cents, Williams Partners L.P (NYSE:WPZ) also expects its dividend offer to grow by 15% annually from 2014 to 2017.
