Energy Transfer Equity LP said Wednesday that it had terminated its merger agreement with rival pipeline operator Williams Cos., a deal valued at nearly $33 billion when it was signed last year.
The move was widely anticipated after a Delaware judge ruled on Friday that Energy Transfer (ETE, +2.01%) could back out, since its lawyers couldn’t deliver a necessary opinion on the deal’s tax treatment.
But the fight may not be over. Williams (WMB, +0.97%) has said it doesn’t believe Energy Transfer has the right to terminate the deal, and filed notice that it will appeal the judge’s ruling. Its shareholders voted in favor of the deal in a special meeting held Monday, despite indications from Energy Transfer that it planned to kill the agreement.
Kelcy Warren, Energy Transfer’s chief executive, worried that the $6 billion cash component of the deal would trigger a credit ratings downgrade that would cascade throughout a network of partnerships he controls.
Williams has said the deal’s collapse would cost it between $4 billion and $10 billion in lost value for its shareholders.
By: Alison Sider (Market Watch).
Photo: WSJ.
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