[BETA] Fortnightly

To further their pending merger, the Williams Companies Inc. has offered to reduce Transco Energy Co.'s cost of capital via a $950-million shot in the arm. The merger will create the second biggest U.S. pipeline company in terms of pipeline miles, but the largest in terms of gas delivered (about 4 trillion British thermal units annu-ally). The recapitalization plan, however, must first be approved by the Securities and Exchange Commission.

On December 12, the Williams Companies Inc. and Transco Energy Co. announced a cash tender offer by Williams to acquire up to 24.6 million shares, or 60 percent of Transco stock, for $17.50 per share. Combined with assumed debt and preferred shares, Williams' acquisition cost will total about $3 billion. Following completion of the tender offer, a newly formed subsidiary of Williams will be merged into Transco, with Transco continuing as a wholly-owned subsidiary of Williams. The boards of directors of both companies have unanimously approved the transaction.