Williams WMB today announced it has agreed to acquire a 50 percent
interest in privately held Access GP and approximately 25 percent of the
limited partner units of Access Midstream Partners, LP ACMP for
approximately $2.4 billion. ACMP announced plans today to acquire most of
Chesapeake Energy Corp.'s CHK remaining natural gas and crude-oil
gathering assets for $2.16 billion.
After closing, Williams and GIP each will own a 50 percent interest in Access
GP, which holds a 2 percent general partner interest and incentive
distribution rights. Williams and GIP have committed to invest up to $1.16
billion in newly issued ACMP limited partner units and will own approximately
25 percent and 43 percent, respectively, of the outstanding ACMP LP units at
the time of the transaction closing (depending on certain capital-raising
activities of ACMP).
This investment – together with ACMP's planned acquisition of Chesapeake's
remaining natural gas and crude-oil gathering assets – significantly expands
Williams' economic opportunities in 10 major shale and unconventional
producing areas, including the Marcellus, Utica, Eagle Ford, Haynesville,
Barnett, Permian, Granite Wash, Colony Wash, Mississippi Lime and Niobrara.
ACMP is an Oklahoma City-based, growth-oriented midstream natural gas services
provider that, following its acquisition of Chesapeake's remaining gathering
business, will have an average throughput of approximately 3.9 billion cubic
feet per day and more than 5,800 miles of gathering pipelines and 8.7 million
acres under long-term dedication.
Transaction Detail
Williams has agreed to acquire GIP's Fund I holdings in ACMP. Those holdings
include GIP Fund I's 50 percent interest in Access GP, which owns the 2
percent general partner interest and incentive distribution rights in ACMP,
and approximately 34.5 million ACMP subordinated limited partner units for
$1.823 billion.
Additionally, Williams and GIP's Fund II each committed to acquire between
approximately $350 million and $580 million (depending on certain
capital-raising activities of ACMP) of Class B payment-in-kind (PIK) units,
Class C subordinated units and potentially common units directly from ACMP to
support ACMP's acquisition of the Chesapeake assets. The Class B and C units
are convertible at the option of the holder or ACMP into common units on the
day after the record date for the distribution to common units for the fiscal
quarters ending Dec. 31, 2014, and Dec. 31, 2013, respectively.
GIP is an independent private-equity fund with more than $15 billion under
management. The New York-based fund invests globally in infrastructure assets.
Its investment in ACMP began in 2009.
Upon closing of these transactions, ACMP will continue to be an independent,
publicly traded master limited partnership. ACMP will continue as the operator
of the assets and maintain its headquarters in Oklahoma City. ACMP will
benefit from the continuity of ACMP's existing, experienced leadership team
and employees, including those associated with the assets ACMP is acquiring
from Chesapeake.
Following this transaction, Williams and GIP, each 50 percent owners of Access
GP, will have equal governance rights; ACMP will be governed by its board of
directors in accordance with its governance documents. Williams will have the
right, upon closing of the transactions announced today, to appoint certain of
its representatives as directors to Access GP's board of directors.
Post-closing, Williams and GIP will own 25 percent and 43 percent,
respectively, of ACMP LP units (depending on certain capital-raising
activities of ACMP). Williams and GIP Fund II will maintain a
right-of-first-offer on the sale of each other's interests.
Separately, ACMP and Chesapeake are engaged through March 1, 2013, in
exclusive negotiations toward a purchase and sale agreement for Chesapeake's
remaining Mid-Continent gathering-and-processing business.
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