Energy Transfer Equity is buying pipeline operator The Williams Cos. for approximately $32.61 billion.
The companies said Monday that the combination creates one of the five biggest energy companies in the world.
Energy Transfer Equity LP will pay $43.50 per share, a 4.6 percent premium to Williams' Friday closing price of $41.60.
Williams' shareholders can choose shares of Energy Transfer Equity affiliate Energy Transfer Corp., cash or a combination of both.
The companies put the deal's value at about $37.7 billion, including debt and other liabilities.
Williams' stockholders will also receive a one-time special dividend of 10 cents per share that will be paid immediately before the acquisition closes.
Both companies' boards approved the deal, which is expected to close in the first half of 2016.