Energy Transfer Equity L.P. (ETE) will acquire pipeline operator Williams Companies (WMB) in a deal is valued at $37.7 billion, MarketWatch reports.
The combination will create the third largest energy franchise in North America and one of the five largest global energy companies, the two companies said Monday.
Under the terms of the acquisition, Energy Transfer, an affiliate of Energy Transfer Equity, will purchase Williams in a cash and stock deal priced at $43.50 per Williams share, a 4.6% increase from its closing price on Friday. Commercial synergies are expected to be over $2 billion in gross earnings by 2020; the company also expects up to $400 million in additional savings.
Williams Companies announced earlier this year that it would merge with Williams Partners L.P. According to the NASDAQ’s website, Energy Transfer’s acquisition of the company was contingent on the merger deal being terminated. Now that it has been, Williams Companies has to pay a $428 million termination fee to Williams Partners.