Williams and Williams Partners have signed an agreement to sell their Canadian businesses to Inter Pipeline in a deal valued at C$1.35bn ($1.03bn).
In connection with the sale, Williams will waive $150m of incentive distribution rights in the quarter following closing, in order to aid the company’s consent to the sale in recognition of the value of inter-company contracts.
After considering this waiver, Williams Partners is set to receive net consideration of approximately $817m, while Williams will receive around $209m.
Williams president and CEO Alan Armstrong said: “We are proud of the tremendous businesses our Canadian team has built since we first began operating in Canada in 2002.
“This transaction represents significant progress on a major component of the 2016 capital and financing plan we announced in January.”
At the time of closing, 25% of the sales proceeds will be deposited with the Canadian Revenue Authority (CRA) or an escrow agent after receiving CRA tax clearance, expected in late this year.
The companies plan to use the proceeds to reduce borrowings on credit facilities.
The transactions are subject to customary closing conditions including Canadian regulatory approval and are expected to close this year.
US-based Williams owns about 60% of Williams Partners, which in turn owns and operates more than 33,000 miles of pipelines system wide and provides natural gas for clean-power generation, heating and industrial use.
Inter Pipeline owns and operates energy infrastructure assets in Western Canada and Northern Europe.
