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Williams and its Partnership Complete Asset Sale for $1.06B


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Williams Companies, Inc. (WMB - Analyst Report) and its master limited partnership, Williams Partners L.P. (WPZ - Snapshot 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 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 - Snapshot Report) and China Petroleum & Chemical Corp. (SNP - Analyst 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.

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