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Wednesday, May 13, 2015

Pipeline giant Williams Cos scraps MLP unit in $13.8 billion deal, (NYSE: WPZ)

Pipeline giant Williams Cos is scrapping its master limited partnership unit by buying Williams Partners LP for about $13.8 billion, the latest in a series of deals in the pipeline industry aimed at simplifying corporate structures.Master Limited Partnerships (MLPs) are also being bought out to eliminate incentivized distribution rights, which over time can divert large chunks of cash returns to general partners and starve the company of capital. Distribution payouts are becoming a burden for energy companies at a time when they are struggling to cope with a steep fall in global crude prices.MLP experts say most mature entities eventually need to be unwound.

Williams Partners L.P., formerly Access Midstream Partners, L. Shares of WPZ traded higher by 18.84% or $8.93/share to $56.33. In the past year, the shares have traded as low as $44.87 and as high as $62.95. On average, 1488510 shares of WPZ exchange hands on a given day and today's volume is recorded at 23965657.