105410

IN THE SUPREME COURT OF THE STATE OF DELAWARE

THE WILLIAMS COMPANIES

,

INC.,

§

§

No. 330, 2016

Plaintiff

Below

-

§

Appellant,

§

Court Below:

-

Court of Chancery

§

of the State of Delaware

v.

§

§

C.A. Nos. 12

168 & 12337

ENERGY TRANSFER EQUITY

,

L.P.,

§

et al.,

§

§

Defendant

s

Below

-

§

Appellee

s

.

§

Submitted:

January 11, 2017

Decided: March 23

, 2017

Before

STRINE

, Chief Justice

;

HOLLAND

,

VALIHURA

,

VAUGHN

, and

SEITZ

, Justices, constituting the Court

en Banc

.

Upon

appeal from the Court of Chancery:

AFFIRMED

.

Kenneth J

.

Nachbar, Esquire

and Zi

-

Xiang Shen, Esquire, Morris, Nichols, Arsht

&

Tunnel LLP

, Wilmington, Delaware

; Sandra C. Goldstein, Esquire

(

argued

)

, Antony

L. Ryan, Esquire, and Kevin J. Orsini, Esquire,

Cravath, Swaine & Moore LLP,

New

York, New York,

for

Plaintiff Below,

Appellant, The Williams Companies, Inc.

Rolin P. Bissell, Esquire, Elena C. Norman, Esquire, Tammy L. Mercer, Esquire,

and Benjamin M. Potts, Esquire, Young Conaway Stargatt

& Taylor, L

LP

,

Wilmington, Delaware

; Michael C. Holmes, Esquire

(

argued

)

, John C. Wander,

Esquire, Jennifer B. Poppe, Esquire, Jeremy C. Marwell, Esquire, Andrew E.

Jackson, Esquire, Craig E. Zieminski, Esquire, Joshua S. Johnson, Esquire, and

Gregory F. Miller, Esqu

i

re, Vinson & Elkins

LLP,

Dallas, Texas,

for

Defendants

Below,

Appellees, Energy Transfer Equity, L.P.,

Energy Transfer Corp LP, ETE

Corp GP, LLC, LE GP, LLC, and Energy Transfer Equity GP, LLC.

VAUGHN

, Justice

, for the Majority

:

1

I. INTRODUCTION

This appeal

arises from

a merger agreement

under which

Energy Transfer

Equity, L.P. (“ETE”), a Delaware limited partnership,

agreed to

acquire

the assets

of

The Williams Companies, Inc., (“Will

iams”), a Delaware corporation

.

Both

Williams and ETE

are in

volved in the gas pipeline business.

T

he Agreement and

Plan of Merger

(the “

Merger

Agreement”

or “the Agreement”

)

signed by Williams

and ETE

contemplated two

step

s.

In the first step,

Williams would merge into a

new

entity,

Energy Transfer

Corp LP

(“ETC”),

a Delaware limited partnership

taxable as a corporation

. ETE would transfer $6.05 billion in cash to ETC in

exchange

for 19% of ETC’s stock.

1

The

$6

.05

billion

and 81% of

ETC’s

stock

would be distributed

to the Williams stockholders

in exchange

for their Williams

stock

. In step

two

, ETC would transfer

the

Williams

assets

to ETE in exchange for

newly issued

ETE

Class E

partnership

units

.

The number of Class E units

transferred

and ETC shares

issued

would be

the same

number

and the two were

expected to

be

similar in value

.

The result would be that the Williams shareholders

1

While ETE and ETC are the primary defendants discussed in this opinion, the relationship of the

remaining defendants is as follows: ETE Corp GP, LLC is a Delaware limited liability company

and the general partner of ETC; LE GP, LLC is a Delaware limited l

iability company and the

general partner of ETE; Energy Transfer Equity GP, LLC is a Delaware limited liability company

that, pursuant to the Merger Agreement, would merge with LE GP, LLC and be the surviving

entity and general partner of ETE. Following t

he merger, ETC was to become the managing

member of Energy Transfer Equity GP, LLC.