Williams, Williams Partners L.P. and Access Midstream Partners, L.P. announce $50 billion merger

Williams (WMB), Williams Partners L.P. (WPZ), and Access Midstream Partners, L.P. (ACMP) announced on Sunday that Williams Partners and Access Midstream Partners have entered into a merger agreement.

The transaction will have an implied value of $50 billion.

Williams' Chief Executive Officer Alan Armstrong, said:

"This is another big step toward our 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. Additionally, the people at both partnerships bring valuable skills, experiences and best practices that will strengthen the combined partnership's ability to execute and grow. 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."

Upon completion of the merger, expected to occur by early 2015, the merged MLP is anticipated to be one of the largest and fastest growing MLPs with expected 2015 adjusted EBITDA of approximately $5 billion, industry-leading 10% to 12% annual limited partner unit distribution growth rate through the 2017 guidance period and with expected strong growth beyond.

ACMP's Chief Executive Officer Mike Stice said:

"Both Access and Williams Partners are experiencing robust growth, and this growth will benefit both our customers and our employees. We expect customers to benefit from the expanded organizational capability and enhanced national scale that the combined business provides. We're already seeing employees benefit from opportunities for advancement and from the additional benefits of being a member of the larger Williams family."

The merged MLP will feature large-scale positions across three key components of the midstream sector, including natural gas pipelines, gathering and processing and natural gas liquids and petrochemical services.

• Natural Gas Pipelines – Transco, Northwest and Gulfstream represent the nation's premier interstate pipeline network. Transco is the nation's largest and fastest-growing pipeline system.
• Gathering and Processing – Large-scale positions in growing natural-gas supply areas in major shale and unconventional producing areas, including the Marcellus, Utica, Piceance, Four Corners, Wyoming, Eagle Ford, Haynesville, Barnett, Mid-continent and Niobrara. Additionally, the merged MLP's business would include oil and natural gas gathering services in the deepwater Gulf of Mexico.
• Natural Gas Liquids and Petrochemical Services – Unique downstream presence on the Gulf Coast and in western Canada provides differentiated long-term growth.

Under the terms of the merger agreement, WPZ will merge with a subsidiary of ACMP in a unit-for-unit exchange at a ratio of 0.86672 ACMP common units per WPZ common unit held by the WPZ public unitholders.

As a result of the merger, WPZ will become wholly owned by ACMP. The merged MLP will be named Williams Partners L.P. and will be based in Tulsa with major offices in Oklahoma City, Houston, Pittsburgh, Salt Lake City and Calgary.

Williams was advised by UBS Investment Bank, Barclays, Citi and Gibson Dunn. The WPZ conflicts committee was advised by Robert W. Baird & Co. Incorporated and Baker Botts L.L.P. The ACMP conflicts committee was advised by Evercore and Richards, Layton & Finger. ACMP was advised by Latham & Watkins.

It is expected that J. Mike Stice will continue in his role as a director of the general partner of the merged MLP. Stice will retire as an officer of the company upon the closing of the merger.

Robert S. Purgason, current COO of the general partner of ACMP, is expected to join Williams as senior VP overseeing the ACMP operations. When the merger is complete, it is expected that Purgason also will serve the merged MLP as one of its general partner's senior VPs, rather than as its COO.

David C. Shiels, who currently serves as CFO of the general partner of ACMP will leave the company to pursue other opportunities after the merger closes. He will continue in his current role until the merger is complete.

Upon the closing of the merger, it is expected that Alan Armstrong and Donald Chappel will serve the merged MLP as its general partner's CEO and CFO, respectively.