Natural gas producer, EQT Corp., announced on Monday its plans to acquire Equitrans Midstream Corp. in an all-stock deal valued at over $35 billion. This comes amidst a market shift that saw EQT shares fall around 3 percent to $36.40 and Equitrans shares rise around 8.9 percent to $12.14 in pre-market trading on the New York Stock Exchange.
The merger, agreed upon unanimously by the boards of both businesses, specified that each outstanding Equitrans stock will be traded for 0.3504 shares of EQT common stock. This equates to an implied value of $12.50 per Equitrans share. Post-deal, EQT shareholders are projected to own roughly 74% of the new conglomerate, leaving Equitrans shareholders with the remaining 26%.
Pending regulatory approvals, shareholder votes, and other standard closing conditions, the merger is set to finalize during the fourth quarter of 2024. Upon completion, three members from Equitrans will join EQT's Board of Directors while EQT's existing executive team remains in charge, with the headquarters staying in Pittsburgh, Pennsylvania.
Describing the acquisition as the most important and transformative in EQT's history, EQT President and CEO Toby Z. Rice stressed the significance of this deal in the global era of natural gas. He views it as a unique chance to combine one of the highest quality natural gas resources globally and compete internationally against already vertically integrated companies.
Industry insiders anticipate that this merger will establish the first large-scale, integrated natural gas producer in America with an unrivaled cost-efficient structure. Guggenheim Securities, LLC, and RBC Capital Markets, LLC served as financial advisors to EQT for this deal, while Equitrans sought financial advice from Barclays and Citi. Legal counsel for Equitrans is provided by Latham & Watkins LLP.
