EQT Buys Equitrans Midstream To Expand Its Natural Gas Operations

EQT Corp. (EQT) was the worst-performing stock in the S&P 500 midday Monday after the natural gas producer announced it was buying midstream infrastructure provider Equitrans Midstream Corp. (ETRN) for approximately $5.5 billion.

EQT explained that the deal gives Equitrans investors 0.3504 share of EQT stock for every share of Equitrans they own. It added that this equaled an implied value of $12.50 per share based on the volume-weighted average of Equitrans stock for 30 days ending on Friday. Equitrans shares closed then at $11.15, while EQT shares finished at $37.52.

EQT said the merger creates “America’s first large-scale, integrated natural gas producer.” CEO Toby Rice called it “the most strategic and transformational transaction” ever pursued by the company. He noted that EQT sees the acquisition as “a once in a lifetime opportunity to vertically integrate one of the highest quality natural gas resource bases anywhere in the world.” The combined company is expected to be valued at more than $35 billion.

EQT previously owned Equitrans, but spun it off in 2018 after being pressured to do so by activist investor Jana Partners.

The companies anticipate the transaction will close in the fourth quarter.

Shares of Equitrans Midstream pared early gains and were up 2.4% as of 12:20 p.m. ET Monday, but were still trading near their best levels in more than two years. EQT shares were down 8.2% to $34.45 and have lost more than 10% so far in 2024.