The Williams Companies Inc (WMB.N): Feedback on Report That WMB Is in Negotiations to Acquire Momentum Midstream

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The Williams Companies Inc (WMB.N): Feedback on Report That WMB Is in Negotiations to Acquire Momentum Midstream

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29 Jun 2026 16:03:05 ET │ 11 pages

The Williams Companies Inc (WMB.N)

Feedback on Report That WMB Is in Negotiations to Acquire Momentum

Midstream

CITI'S TAKE Buy

Price (26 Jun 26 16:00) US$77.92WMB traded down ~4% this morning following news reports (Reuters, 28

Target price US$83.00 Jun) over the weekend that the company is in talks to acquire Momentum

Midstream for $5.5bln. We discuss feedback we've received from Expected share price return 6.5%

investors below. Expected dividend yield 2.7%

Expected total return 9.2%

Is this the best use of capital? At an implied ~10x EBITDA valuation, a potential Market Cap US$95,296M

deal would be accretive relative to WMB trading at ~15x FY2 EBITDA. That said,

WMB's >$50bln organic opportunity set and recent execution of 20% project IRRs is

a more compelling use of funds based on our conversations with investors. Some

Spiro DounisAC

view a potential pivot back into conventional midstream as an indication that the

+1-212-816-6926

Power opportunity set is perhaps not as robust as indicated. We do not share that spiro.dounis@citi.com

view given WMB seeking out financial partners to grow the Power business at an

accelerated pace; however, it's a question being asked this morning. Douglas Irwin

+1-212-816-9525

douglas.irwin@citi.com

Charles BryantCan the balance sheet handle this too? WMB has limited near-term balance sheet

+1-212-816-3284flexibility to support a large deal with leverage trending at or above the long-term

charles.bryant@citi.com

target ceiling over the next two years due to elevated capex. WMB is already

exploring the need for a financial partner to fund the organic Power Innovation

opportunity set.