Item 1.01
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Entry into a Material Definitive Agreement.
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Williams SPA
On August 8, 2016, The Williams Companies, Inc. (Williams) and The Williams Companies International Holdings B.V. (WCIH), an
indirect wholly-owned subsidiary of Williams, entered into a Share Purchase Agreement (the Williams SPA) with Inter Pipeline Ltd. (Inter Pipeline) pursuant to which WCIH agreed to sell, and Inter Pipeline agreed to purchase,
100% of the issued and outstanding shares of each of Williams Canada Development ULC, Williams Horizon Offgas ULC, Williams Canada Employee Services, Inc., and Williams Canada Propylene ULC (such shares, the Purchased Shares, and such
companies, the Target Companies). Williams has agreed to provide to Inter Pipeline at closing a guarantee of the obligations of WCIH under the Williams SPA. The purchase price for the Purchased Shares was CAD$472.5 million, subject to
purchase price adjustments for (1) changes in the net working capital, expenditures, and debt of the Target Companies in the period between signing and closing and (2) reductions related to certain royalty credits under Alberta
Energys Petrochemicals Diversification Program based upon the amount of such credits ultimately awarded to the Target Companies. In addition, 25% of the purchase price will be held in escrow pending the receipt of a clearance certificate (a
Clearance Certificate) issued by the Canada Revenue Agency (the CRA) pursuant to the relevant provisions in section 116 of the Income Tax Act of Canada, as amended (the Tax Act), with respect to any of the
Purchased Shares that are taxable Canadian property as defined in the Tax Act.
The Williams SPA includes customary (1) representations
and warranties of the parties, (2) covenants, including without limitation covenants with respect to actions taken prior to the closing, cooperation with respect to regulatory issues, and access to each others information, and
(3) indemnities. The Williams SPA is also subject to customary closing conditions, including: the receipt of advance regulatory approval or the waiver of such proceedings under the Competition Act of Canada, as amended (the Competition
Act); and the absence of any order, injunction or decree, issued by a court of competent jurisdiction preventing the consummation of the transactions contemplated by the Williams SPA. The Williams SPA contains certain termination rights for
the parties, including if the closing of the transactions contemplated thereby does not occur by October 31, 2016 or, under certain conditions, if there has been a breach of certain representations and warranties by either party. Closing is
anticipated to occur in 2016.
WPZ SPA
On
August 8, 2016, Williams Partners L.P. (WPZ) and Williams Energy Canada LP (WEC), an indirect wholly-owned subsidiary of WPZ, entered into a Share Purchase Agreement (the WPZ SPA, and together with the
Williams SPA, the Agreements) with Inter Pipeline pursuant to which WEC agreed to sell, and Inter Pipeline agreed to purchase, 100% of the issued and outstanding shares of Williams Energy Canada ULC (such shares, the Purchased
Shares, and such company, the Target Company). WPZ has agreed to provide to Inter Pipeline at closing a guarantee of the obligations of WEC under the WPZ SPA. The purchase price for the Purchased Shares was CAD$877.5 million,
subject to purchase price adjustments for changes in the net working capital and debt of the Target Company in the period between signing and closing. In addition, 25% of the purchase price will be held in escrow pending the receipt of a Clearance
Certificate issued by the CRA pursuant to the relevant provisions in section 116 of the Tax Act with respect to any of the Purchased Shares that are taxable Canadian property as defined in the Tax Act.
The WPZ SPA includes customary (1) representations and warranties of the parties, (2) covenants, including without limitation covenants with respect
to actions taken prior to the closing, cooperation with respect to regulatory issues, and access to each others information, and (3) indemnities. The WPZ SPA is also subject to customary closing conditions, including: the receipt of
advance regulatory approval or the waiver of such proceedings under the Competition Act; and the absence of any order, injunction or decree, issued by a court of competent jurisdiction preventing the consummation of the transactions contemplated by
the WPZ SPA. The WPZ SPA contains certain termination rights for the parties, including if the closing of the transactions contemplated thereby does not occur by October 31, 2016 or, under certain conditions, if there has been a breach of
certain representations and warranties by either party. Closing is anticipated to occur in 2016.
Disclaimers
The foregoing descriptions of each of the Agreements do not purport to be complete and are qualified in their entirety by reference to the applicable
Agreements, copies of which are attached as Exhibit 2.1 and 2.2 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference. The Agreements are included as exhibits to this Form 8-K to provide investors and security
holders with information regarding their terms. They are not intended to provide any other factual information about Williams, WPZ or the other parties to the Agreements. The representations, warranties and covenants contained in the Agreements were
made only for the purposes of the applicable agreement and as of a specific date; were solely for the benefit of the parties to such agreement; may be subject to limitations agreed upon by the contracting parties,
including being qualified by disclosure schedules made for the purposes of allocating contractual risk between
the parties thereto instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the
representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of Williams, WPZ or the other parties to the Agreements or any of their respective subsidiaries and affiliates.
Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreements, which subsequent information may or may not be fully reflected in Williams or WPZs public
disclosures.