Merger turns Shaky for Williams Cos. and Energy Transfer







Reports are growing of the possibility that the $40 billion merger of Energy Transfer Equity LP and Tulsa-based Williams Cos. might be called off because their stock has taken a huge fall.

The deal was announced last September and was expected to be completed in the first half of this year, but both Bloomberg News and Barron’s reported this week there exists a chance the deal could be cancelled.

Here’s why. Shares of Williams and Williams Partners are down about 40 percent. Shares in Energy Transfer Equity have dropped 28 percent. Neither side is commenting about the merger and what might happen to it.

Williams trading is so bad that Fitch and Moody’s downgraded the company to junk bond status. Shares in Williams Partners remain at investment grade.

New terms in the merger might have to be made because both companies used higher prices for oil to make their projections late last year. Energy Transfer estimated oil prices would be $45 to $52 a barrel. And Energy Transfer, run by billionaire Kelcy Warren had to do a lot of convincing to get Williams to merge.

But under the merger agreement, Williams would have to pay $1.48 billion if it decides to break off the deal with Energy Transfer. And Williams doesn’t have that kind of money lying around.