Williams, Williams Partners Agree to Sell Canadian Businesses for $1.35 Billion CAD (~$1.03 Billion USD)
August 08 2016 - 4:30PM
Business Wire
- Williams Partners to Receive
Consideration Totaling ~$817 Million USD
- Williams to Receive ~$209 Million
USD
Williams (NYSE: WMB) and Williams Partners (NYSE: WPZ) announced
today they have agreed to sell the companies’ Canadian businesses
to Inter Pipeline Ltd. (“Inter Pipeline”) (TSX: IPL) for combined
cash proceeds of $1.35 billion CAD.
In connection with the sale, Williams agreed to waive $150
million USD of incentive distribution rights in the quarter
following closing to facilitate the Partnership’s consent to the
sale in recognition of the value of inter-company contracts. After
taking into account this waiver, Williams Partners will receive net
consideration of ~$817 Million USD and Williams will receive net
consideration of ~$209 Million USD.
At closing, in compliance with certain tax rules pertaining to a
sale of Canadian assets by a foreign parent, 25 percent of the
proceeds will be deposited with the Canadian Revenue Authority
("CRA") or an escrow agent pending receipt of CRA tax clearance
which is expected in late 2016 or early 2017. The companies do not
expect a taxable gain in light of the substantial tax basis in the
assets. Williams and Williams Partners plan to use the cash
proceeds from the transaction to reduce borrowings on credit
facilities.
“We are proud of the tremendous businesses our Canadian team has
built since we first began operating in Canada in 2002,” Williams’
President and Chief Executive Officer Alan Armstrong said today.
“This transaction represents significant progress on a major
component of the 2016 capital and financing plan we announced in
January.”
The transactions are expected to close in 2016. Closing is
subject to customary closing conditions including Canadian
regulatory approval. TD Securities Inc. acted as lead financial
advisor to Williams on the transactions and provided fairness
opinions to the board of directors of both Williams and Williams
Partners that the consideration to be received under the
transaction was fair, from a financial point of view, to each
company respectively. Barclays acted as a co-advisor to Williams on
the transactions.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure connecting North American natural gas and natural
gas products to growing demand for cleaner fuel and feedstocks.
Headquartered in Tulsa, Okla., Williams owns approximately 60
percent of Williams Partners L.P. (NYSE: WPZ), including all of the
2 percent general-partner interest. Williams Partners is an
industry-leading, large-cap master limited partnership with
operations across the natural gas value chain from gathering,
processing and interstate transportation of natural gas and natural
gas liquids to petchem production of ethylene, propylene and other
olefins. With major positions in top U.S. supply basins and also in
Canada, Williams Partners owns and operates more than 33,000 miles
of pipelines system wide – including the nation’s largest volume
and fastest growing pipeline – providing natural gas for
clean-power generation, heating and industrial use. Williams
Partners’ operations touch approximately 30 percent of U.S. natural
gas. www.williams.com
About Williams Partners
Williams Partners (NYSE: WPZ) is an industry-leading, large-cap
natural gas infrastructure master limited partnership with a strong
growth outlook and major positions in key U.S. supply basins and
also in Canada. Williams Partners has operations across the natural
gas value chain from gathering, processing and interstate
transportation of natural gas and natural gas liquids to petchem
production of ethylene, propylene and other olefins. Williams
Partners owns and operates more than 33,000 miles of pipelines
system wide – including the nation’s largest volume and fastest
growing pipeline – providing natural gas for clean-power
generation, heating and industrial use. Williams Partners’
operations touch approximately 30 percent of U.S. natural gas.
Tulsa, Okla.-based Williams (NYSE: WMB), a premier provider of
large-scale North American natural gas infrastructure, owns 60
percent of Williams Partners, including all of the 2 percent
general-partner interest. www.williams.com
About Inter Pipeline Ltd.
Inter Pipeline is a major petroleum transportation, bulk liquid
storage and natural gas liquids extraction business based in
Calgary, Alberta, Canada. Inter Pipeline owns and operates energy
infrastructure assets in western Canada and northern Europe.
Additional information about Inter Pipeline can be found at
www.interpipeline.com. Inter Pipeline is a member of the
S&P/TSX 60 Index and its shares trade on the Toronto Stock
Exchange under the symbol IPL.
Portions of this document may constitute
“forward-looking statements” as defined by federal law. Although
the company believes any such statements are based on reasonable
assumptions, there is no assurance that actual outcomes will not be
materially different. Any such statements are made in reliance on
the “safe harbor” protections provided under the Private Securities
Reform Act of 1995. Additional information about issues that could
lead to material changes in performance is contained in the
company’s annual reports filed with the Securities and Exchange
Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20160808006227/en/
WilliamsMedia Contact:Keith Isbell,
918-573-7308orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
Williams Partners (NYSE:WPZ)
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