Earlier this year, Williams Companies rejected the takeover offer made by Energy Transfer Equity (ETE) for $53.1bn.
The company had then said that the offer undervalues the company and would not provide value it can achieve on a standalone basis.
As per the new agreement, ETE affiliate Energy Transfer (ETC) will purchase Williams at an implied current price of $43.50 per Williams share.
The deal follows the termination of the previously signed agreement by Williams Companies to acquire all of the public outstanding common units of its affiliated partnership Williams Partners for approximately $13.8bn.
Williams owns 66% stake in Williams Partners and Energy Transfer said that the acquisition is dependent on Williams terminating the pending acquisition.
ETE chairman Kelcy Warren said: "I believe that the combination of Williams and ETE will create substantial value for both companies’ stakeholders that would not be realized otherwise."
The new transaction is expected to create the third largest energy firm in North America and one of the largest global energy companies.
Williams president and chief executive officer Alan Armstrong said: "Williams’ intense focus on connecting the best natural gas supplies to the best natural gas markets will be a significant complement to the ETE family of diverse energy infrastructure.
"As a combined company, we will have enhanced prospects for growth, be better able to connect our customers to more diverse markets, and have more stability in an environment of low commodity prices.
"Importantly, Williams Partners will retain its current name and remain a publicly traded partnership headquartered in Tulsa, Oklahoma."
ETE expects the commercial synergies to exceed $2bn of incremental earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2020.
Subject to approval of the merger from Williams’ stockholders and all required regulatory approvals, the transaction is planned to be completed in first half of 2016.
Image: Energy Transfer Equity expects the deal create the third largest energy firm in North America. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.
