Energy Transfer Equity terminates $37.7bn merger agreement with Williams

US-based pipeline company Energy Transfer Equity (ETE) has terminated its previously announced $37.7bn merger agreement with the Williams Companies.

The Delaware Court of Chancery issued an opinion finding that ETE is contractually entitled to cease the agreement with Williams as ETE’s counsel Latham & Watkins could not deliver a required tax opinion prior to the 28 June 2016 outside date in the merger agreement.

Latham advised ETE that it failed to deliver the opinion as of the outside date.

Consistent with its rights and obligations under the agreement, ETE provided written notice terminating the merger agreement due to failure of conditions.

The combination between ETE and Williams was announced in September last year and would have created the third largest energy franchise in North America.

The merger will also have benefitted customers by enabling further investments in capital projects.

Williams has appealed the decision by the Delaware Court of Chancery to the Delaware Supreme Court.

The company said it does not believe ETE has a right to terminate the merger agreement as it has breached the agreement by failing to cooperate and use necessary efforts to satisfy the conditions to closing.

ETE’s family of companies owns and operates about 71,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines.

Williams owns about 60% of Williams Partners, which has operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins.