Shares of Williams Cos. (NYSE: WMB), the Oklahoma-based operator of a natural gas pipeline system that stretches from Texas into the Southeast and up through the mid-Atlantic region, surged more than 18% Monday on news the company will pay almost $6 billion for the 50% of Access Midstream Partners (NYSE: ACMP) it does not already own.
Units of Williams Partners (NYSE: WPZ), the master limited partnership with natural gas gathering and processing operations in the Marcellus and Utica shales, gained more than 7%. At the close of trading on Friday, June 13, the 55.1 million LP units Williams is acquiring had a market value of $3.6 billion, according to a statement released by the company.
News of the Williams deal to acquire Access Midstream ignited a rally among MLP exchange traded products. Three of the top-10 ETPs on a percentage basis Monday are MLP plays, including the leader of the pack, the Global X MLP & Energy Infrastructure ETF (NYSEArca: MLPX).
MLPX, which recently crossed the $100 million in assets under management mark, is up 2.2% and hit a new all-time earlier Monday. [Global X Income ETFs See Assets Surge]
Williams Cos. Is MLPX’s second-largest holding at a weight of 8.95% while Access Midstream represents 1.1% of the ETF’s weight, according to Global X data. MLPX is just 10 months old and already has almost $132 million in assets under management. The ETF doesn’t hold more than 25% of its holdings in MLPs due to regulatory restrictions. However, since MLPX is structured as a Regulated Investment Company or Unite Investment Trust, the fund is eligible to pass taxes on capital gains, dividends or interest earned directly to clients or individual investors.
This process helps protect investors from double taxation where the company and individual investors would be taxed. [MLP ETF Taxes: An Important Issue]