Global Infrastructure Partners II (GIP) has sold 50% general partner interest and 55.1 million limited partner units in Oklahoma city-based Access Midstream Partners L.P. to Williams.
Williams announced that it has agreed to acquire the asset for US$5.995 billion in cash. Access Midstream Partners, L.P. owns, operates, develops and acquires natural gas, natural gas liquids (NGLs) and oil gathering systems and other midstream energy assets. The Company is focused on natural gas and NGL gathering.
After this transaction Williams will own 100 percent of the general partner and 50 percent of the limited partner interests in Access Midstream Partners. This transaction will accelerate the transformation of the company to Pure-Play GP Holding-Company Structure.
UBS Investment Bank, Barclays and Citigroup acted as financial advisors and Gibson Dunn acted as legal counsel to Williams. Additionally, UBS Investment Bank, Barclays and Citigroup are acting as lead arrangers for the Williams interim-liquidity facility.
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. The firm aims to increase fee-based revenues to more than 80 percent of its gross margin as a result of Access Midstream Partners' fee-based revenues.
Williams expects to close the acquisition of GIP's Access Midstream Partners interests in the third quarter this year.
Williams also announced a proposal to merge Williams Partners L.P. with and into Access Midstream Partners. Alan Armstrong, Williams' chief executive officer, stated:
We're announcing a series of steps designed to amplify the benefits of our existing relationship with Access Midstream Partners, an increase in our dividend and the acceleration of Williams' move to a pure-play GP holding company of two leading master limited partnerships. The proposed merger of Williams Partners and Access Midstream Partners, if consummated, would create an industry-leading, large-scale MLP with substantial positions across the midstream business - spanning natural gas gathering and processing, natural gas transmission pipelines, and NGL and petchem services. Our positions in these businesses provide clearly identified growth for the foreseeable future.
Williams is one of the leading energy infrastructure companies in North America. It owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines.