Enterprise No Longer Interested in Williams Takeover

Enterprise Products Partners announced Thursday it is no longer interested in buying Williams Companies after mentioning that Williams showed a “lack of engagement” in the proposed deal.

This decision shortly follows another altercation Williams is in involving a proxy fight with its fourth-largest investor who wants to clean the entire Williams board with new members following the failed merger with Energy Transfer Equity. Williams appointed on August 29 three new board members, hoping to dissuade shareholder support for a new slate of members.

According to Bloomberg, Williams responded as surprised by Enterprise’s decision to no longer pursue the buyout and said it remains “open to considering any potential strategic alternative.”

Enterprise’s announcement shortly follows Enbridge Energy’s announcement to buy Spectra Energy in an all-stock deal for $28 billion.

“I do think that consolidation will continue to be a trend for midstream companies,” said analyst with Moringstar Inc. Mark Hanson.

The Enbridge and Spectra deal brings pressure to other big midstream companies like Kinder Morgan and Enterprise to follow suit and consolidate as a strategy to save money following a downturn in oil prices.

According to Rebecca Followill, head of research at U.S. Capital Advisors, Enbridge’s takeover of Spectra may start a “supermajor” era for the pipeline industry, setting off a trend of consolidation that could increase throughout 2016.