Back to top

Analyst Blog

Zacks Equity Research

Williams and its Partnership Complete Asset Sale for $1.06B

WPZ SNP WMB ENB

Trades from $3

Williams Companies, Inc. (WMB - Free Report) and its master limited partnership, Williams Partners L.P. (WPZ - Free Report) , recently announced that they have completed the sale of their Canadian businesses to Inter Pipeline Ltd. for combined cash proceeds of approximately $1.06 billion. This deal, announced at the beginning of August, is aimed at reducing the debt of the two companies.

In recognition of the value of inter-company contracts, Williams has decided to give up $150 million of incentive distribution rights in the quarter after the deal to ease the partnership’s consent to the sale. After taking into account this waiver, the combined sale price division is about $839 million for Williams Partners and approximately $220 million for Williams.

TD Securities Inc. and Barclays acted as lead financial adviser and co-adviser to Williams on the transactions. Also, Williams and Williams Partners do not expect to record a taxable gain on the transactions.

Tulsa, OK-based Williams is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transportation of natural gas.

Williams Partners, on the other hand, is an energy master limited partnership engaged in gathering, transportation, treating and processing of natural gas as well as fractionation and storage of NGLs. The partnership owns interests in three major interstate natural gas pipelines that together deliver 30% of the natural gas consumed in the U.S.

WILLIAMS COS Price

 

Williams currently carries a Zacks Rank #4 (Sell). Williams Partners, on the other hand, carries a Zacks Rank #5 (Strong Sell).

Some better-ranked players in the broader energy sector include Enbridge Inc. (ENB - Free Report) and China Petroleum & Chemical Corp. (SNP - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the last four quarters, Enbridge posted an average positive earnings surprise of 4.8%.

China Petroleum & Chemical, on the other hand, posted an average positive earnings surprise of 1,383.3% for the last four quarters.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

WILLIAMS PTR LP (WPZ) - free report >>

CHINA PETRO&CHM (SNP) - free report >>

WILLIAMS COS (WMB) - free report >>

ENBRIDGE INC (ENB) - free report >>