Williams to buy GIP's assetsStaff writer ▼ | June 17, 2014
Williams has agreed to acquire the 50 percent general partner interest and 55.1 million limited partner units in Oklahoma City-based Access Midstream Partners L.P. held by Global Infrastructure Partners II (GIP) for $5.995 billion in cash.Williams has agreed to acquire the 50 percent general partner interest and 55.1 million limited partner units in Oklahoma City-based Access Midstream Partners L.P. held by Global Infrastructure Partners II (GIP) for $5.995 billion in cash.
At the close of trading on Friday, June 13, the 55.1 million LP units had a market value of $3.6 billion. Upon closing, Williams will own 100 percent of the general partner and 50 percent of the limited partner interests in Access Midstream Partners.
This transaction follows Williams' acquisition of its 50 percent GP interest and 23 percent LP interest in Access Midstream Partners in December 2012. Williams expects the acquisition to close in the third quarter of 2014. Following the closing of the acquisition, Williams plans to increase its third-quarter 2014 dividend by 32 percent to $0.56 per share.
Williams also announced a proposal to merge Williams Partners L.P. with and into Access Midstream Partners.
The acquisition of the additional interests in Access Midstream Partners is expected to increase Williams' cash flow per share as a result of rapid growth in Access Midstream Partners' business, which drives attractive growth in its GP/IDR (incentive distribution rights) and LP cash-distributions.
Williams expects the acquisition to increase fee-based revenues to more than 80 percent of its gross margin as a result of Access Midstream Partners' fee-based revenues.
Access Midstream Partners' business growth is driven by expected production increases in its portfolio of more than 8.3 million acres under dedication in major shale and unconventional producing areas, including the Marcellus, Utica, Eagle Ford, Haynesville, Barnett, Mid-continent and Niobrara.
Williams expects to close the acquisition of GIP's Access Midstream Partners interests in the third quarter this year. The closing of the acquisition is not conditioned upon the consummation of Williams' proposed merger of Williams Partners and Access Midstream Partners. Closing of the acquisition is subject only to the receipt of regulatory approvals under provisions of the Hart-Scott-Rodino Act. ■