Energy Transfer Ends Williams Merger

As expected, Dallas-based Energy Transfer Equity (ETE) canceled its merger agreement with the Williams Companies on Wednesday after a Delaware judge issued an opinion last week stating the transaction could be voided.

ETE sought for months to kill the deal, announced Sept. 28, as faultering energy markets rendered the $38 billion deal unsustainable in the company’s view. ETE also said Williams had been unable to deliver a “required tax opinion” provided cause to end the agreement.

Williams filed an appeal in the Delaware Supreme Court on June 24 challenging the Delaware judge’s opinion, stating the company does not believe ETE has a right to terminate the merger, because ETE breached the terms by failing to cooperate and use necessary efforts to satisfy the conditions to closing, including delivery of Latham & Watkins LLP’s Section 721(a) tax opinion.

Despite the judge’s ruling, Williams stockholders voted to go ahead and approve the merger Monday. At a special meeting more than 80% of votes cast favored the merger, representing more than 63% of all outstanding shares of common stock, according to Williams.

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