Williams Partners L.P. and Williams Pipeline Partners L.P. Announce Merger Agreement

Williams Partners L.P. (NYSE: WPZ) and Williams Pipeline Partners L.P. (NYSE: WMZ) have signed a merger agreement.

It is anticipated that the associated Form S-4 Registration Statement and Joint Proxy Statement/Prospectus will be filed shortly with the Securities and Exchange Commission.

Merger Agreement Terms

Under the terms of the merger agreement, public WMZ common unitholders will receive 0.7584 WPZ common units for each WMZ common unit they own at the effective time of the merger. As a result of the merger, all currently outstanding WMZ common units and WMZ subordinated units will be extinguished, and Williams Pipeline Partners will be indirectly wholly owned by Williams Partners.

The WMZ Conflicts Committee, which comprises the independent members of the board of directors of Williams Pipeline Partners' general partner, has unanimously approved the merger and the merger agreement. The WMZ Conflicts Committee determined that the merger is in the best interests of the partnership and the holders of WMZ common units that are not owned by Williams Partners and its affiliates.

The approval and adoption of the merger agreement by Williams Pipeline Partners requires approval by a majority of the outstanding WMZ common units other than WMZ common units held by Williams Partners and its affiliates. It also requires approval of a majority of the outstanding subordinated units of WMZ, as well as the expiration of the applicable waiting period under the Hart-Scott-Rodino Act. Williams Pipeline Partners' general partner owns all of the outstanding subordinated units of WMZ and has agreed to vote them in favor of the merger.

Special Meeting

Voting on the merger agreement will take place at a special meeting of WMZ limited partners on a future date to be determined after the SEC declares the Form S-4 effective.

Unitholders on the close of business on the record date to be set for the special meeting will be eligible to vote on the merger. Unitholders of record may either vote in person at the special meeting, or by proxy under the procedures detailed in the S-4 filing.

Strategic Restructuring

This merger is the final step in the strategic restructuring that Williams (NYSE: WMB) and Williams Partners announced on Jan. 19. The restructuring primarily involved Williams contributing most of its midstream and interstate gas pipeline assets, including its general- and limited-partner interests in Williams Pipeline Partners, to Williams Partners. As a result, Williams Partners currently owns a 47.7-percent interest in Williams Pipeline Partners.

It was originally announced that Williams Partners would initiate an exchange offer for the outstanding Williams Pipeline Partners units following the asset contribution at a fixed exchange ratio of 0.7584 WPZ units for each WMZ unit. However, a subsequent call of any untendered WMZ units would have been necessary if 100 percent of the publicly held WMZ units were not tendered in an exchange offer. As such, Williams Partners and the WMZ Conflicts Committee determined a single merger transaction would be a more attractive alternative.

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