Bear Stearns Purchases Power Assets from the Williams Companies

TRANSACTION SIGNIFICANTLY EXPANDS BEAR ENERGY.

Deal includes power plant tolling agreements, energy purchase and sale contracts, customer business and an associated trading book.

New York, NY —The Bear Stearns Companies Inc. (NYSE:BSC) today announced it has signed a definitive agreement to acquire substantially all of the power and natural gas assets comprising the power trading business of Williams Power Company, Inc., an energy trading and marketing subsidiary of The Williams Companies, Inc. (NYSE:WMB). Bear Energy LP, a Houston-based, wholly owned subsidiary of Bear Stearns, will assume the portfolio of assets, which includes approximately 7,700 megawatts of gas-fired tolling capacity, 1,800 megawatts of full requirements power supply contracts, and an associated trading book. Bear Energy will also acquire various information systems and seek to hire Williams Power Company employees.

The transaction, which is subject to regulatory and other approvals, is expected to close during Bear Stearns’ fiscal fourth quarter ending November 30, 2007, and is expected to be accretive to earnings and earnings per share in fiscal 2008.

“This transaction marks a substantial leap forward for our energy business,” commented Bear Stearns chairman and chief executive officer James E. Cayne. “We have taken our presence in the energy markets to a new level in a way that is consistent with our prudent approach to building businesses. This acquisition provides us with strategically located generation capacity in key markets that will position us to take advantage of improving market and regulatory dynamics.”

“We have great admiration for the employees of Williams Power Company and look forward to building on the customer focused franchise they’ve created,” said Paul Posoli, President of Bear Energy. “This transaction will provide us with an immediate, geographically diverse, North American presence that allows us to broaden existing customer relationships while gaining new customers in both electricity and natural gas.”

Bear Stearns was advised by its investment banking division on the transaction.