EQT Corporation to acquire Equitrans Midstream Corporation in US$5.45billion merger

EQT Corporation has announced the acquisition of natural gas provider Equitrans Midstream Corporation in an all-stock transaction valued at US$5.45 billion.

The EQT Corporation and Equitrans Midstream Corporation deal creates America's first large-scale, integrated natural gas producer with an unrivaled low-cost structure. It offers investors the best risk-adjusted exposure to natural gas prices and includes over 2,000 miles of irreplaceable pipeline infrastructure. The combined company will hold 27.6 Tcfe of proved reserves across approximately 1.9 million net acres, with robust production and gathering throughput. It also provides a pathway to reduce EQT's long-term corporate free cash flow breakeven to less than $2 per MMBtu, ensuring strong free cash flow generation. The integrated cost structure reduces hedging requirements, unlocking upside to gas price volatility. The deal significantly improves the economics of EQT's remaining drilling locations and mitigates operational execution risk with a high percentage of operated production flowing through EQT-owned midstream assets. Overall, the transaction is expected to be highly accretive to free cash flow per share, with projected cumulative free cash flow generation of approximately $16 billion from 2025 to 2029 at recent strip prices.

Due to the transaction, EQT's current shareholders are anticipated to possess roughly 74% of the merged entity, while Equitrans' shareholders are expected to hold around 26%. The completion of the transaction is projected to occur in Q4 of 2024. Guggenheim Securities, LLC played a key role as the lead financial advisor, with RBC Capital Markets, LLC also providing financial advisory services to EQT. Kirkland & Ellis LLP is acting as EQT's legal counsel for the transaction. Barclays and Citi provided financial advisory services to Equitrans, while Latham & Watkins LLP serves as Equitrans' legal counsel.