, Columnist
Energy Transfer's Scorched-Earth Defense
Drastically slashed synergies estimate raises questions about deal.
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The plot of Energy Transfer Equity's $37 billion bid for Williams Cos. has now thickened to the point of rank coagulation.
In its latest amendment to the merger agreement, released on Wednesday, Energy Transfer revealed the collapse in energy prices means annual commercial synergies in 2020 would amount to $170 million under its base case, "materially less" than the $2 billion-plus touted when the deal was announced in September. It also warned the $6 billion cash portion of the cash-and-stock deal could knock its credit rating. Just for good measure -- and to save money, you understand -- it would also have to renege on an earlier pledge to substantially maintain Williams' presence in Tulsa and Oklahoma City.