Williams Energy Services said it is selling Thermogas, itspropane distribution company, to Ferrellgas for $432.5 million,including $257.5 million in cash and $175 million through seniorFerrellgas common units, which Williams intends to convert to $175million in cash. The sale is expected to close before the end of1999. Williams plans to redeploy the proceeds into wholesalemarketing and midstream operations.

“Williams’ strategy is to focus on our wholesale businesses andcore growth areas of the company,” said Williams Energy ServicesCEO Steve Malcolm. “The company is investing in key infrastructureprojects and services in the refined products and natural gasliquids areas.”

Based on retail gallons sold, the deal makes Ferrellgas thelargest retail marketer of propane in the country, approaching abillion gallons and serving more than a million customers in 45states. “It will immediately give a large boost to our cash flowand earnings,” said Ferrellgas CEO Danley K. Sheldon. “Thetransaction should be accretive to our unitholders andsignificantly expands our common unit distribution coverage…..”

Ferrellgas President Chip Schaechterle said he intends to offernearly all Thermogas employees new positions. Thermogas has 1,400employees in 18 states.

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