Williams sells $275 million of 9.875% convertible preferreds to MEHC

Nashville, Tenn., March 7 - Williams Cos. sold $275 million of 9.875% cumulative convertible preferred stock to MEHC Investment Inc., a subsidiary of MidAmerican Energy Holdings Co., and a member of the Berkshire Hathaway family of companies. The transaction, conditional on closing of Williams' sale of its Kern River interstate gas pipeline business to MidAmerican, is expected to close before March 31, according to a statment by Williams.

MEHC Investment is buying 1.47 million of the convertible preferred shares at $187.50 each, which are convertible into 10 shares of Williams common stock.

"We believe this equity investment, along with the additional steps we've taken or are in the process of taking, gives us a level of financial strength and flexibility comparable to, or better than, that which was the basis for the rating agencies' reaffirmation of our investment-grade credit ratings," said Keith Bailey, Williams chairman.

"The fact that our newest long-term stockholder is viewed by many as being the most astute value investor in the market today, represents a strong endorsement of our strategy and our future prospects for solid business performance."

David L. Sokol, MidAmerican chairman and chief executive officer, said: "Williams has consistently been one of the highest-quality players in the energy industry. We look forward to a long-term relationship with them."

"I echo David's comments about a long-term relationship with Williams," said Warren E. Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. "Williams has all the fundamentals in place - solid assets, strong demand for its products and a reputation for excellent customer service."

Lehman Brothers was financial adviser to Williams in connection with the transaction.

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