Energy Transfer Equity LP said Wednesday 29 June that it had terminated its merger agreement with rival pipeline operator Williams Cos., a deal valued at nearly US$33 billion when it was signed last year.
The move was widely anticipated after a Delaware judge ruled on Friday 24 June that Energy Transfer could back out, since its lawyers couldnÂ鶹´«Ã½Ó³»™t deliver a necessary opinion on the dealÂ鶹´«Ã½Ó³»™s tax treatment.
But the fight may not be over. Williams has said it doesnÂ鶹´«Ã½Ó³»™t believe Energy Transfer has the right to terminate the deal, and filed notice that it will appeal the judgeÂ鶹´«Ã½Ó³»™s ruling. Its shareholders voted in favour of the deal in a special meeting held Monday 27 June, despite indications from Energy Transfer that it planned to kill the agreement.
Kelcy Warren, Energy TransferÂ鶹´«Ã½Ó³»™s Chief Executive, worried that the US$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 dealÂ鶹´«Ã½Ó³»™s collapse would cost it between US$4 billion and US10 billion in lost value for its shareholders.
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