Williams Companies (NYSE:WMB) agreed to a $6 billion deal to acquire full ownership of Access Midstream Partners (NYSE:ACMP), seeking to capitalize on the surge in domestic natural gas production.
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Williams, which focuses on energy infrastructure like pipelines, said Monday it will buy the remaining 50% stake in Access Midstream from Global Infrastructure Partners II.
The Tulsa, Okla.-based company also plans to purchase 55.1 million limited-partner units, giving Williams 50% of the limited-partner interests. Those units were valued at $3.6 billion based on Friday’s closing price.
Williams soared 18.8% to $56.07 in recent trading. The stock was already up 22% on the year through Friday. Access Midstream rose 28 cents to $65.64.
The deal is expected to close in the third quarter. Williams plans to fund about half of the acquisition with equity, while the remainder will be paid for using a combination of cash and debt.
Williams anticipates raising its quarterly dividend by 32% to 56 cents a share once the transaction is completed.
Access Midstream’s portfolio includes 8.3 million acres at Eagle Ford, Marcellus, Utica and other major U.S. shale plays. According to the company’s website, Access Midstream owns and operates natural gas midstream assets across nine states, with more than 6,300 miles of gas pipelines.
Williams chief executive Alan Armstrong said the proposed transaction will “further enhance our presence in attractive growth basins.”
Williams plans to merge Access Midstream with the company’s master limited partnership, Williams Partners L.P. (NYSE:WPZ). The combined MLP is projected to have 2015 adjusted EBITDA of approximately $5 billion.