EQT Buys Equitrans Midstream To Expand Its Natural Gas Operations

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Key Takeaways

• EQT will pay approximately $5.5 billion for midstream natural gas infrastructure provider Equitrans Midstream, its former entity, as it expands its reach into the natural gas sector.
• The acquisition gives Equitrans investors 0.3504 share of EQT stock for every dispensation they hold.
• EQT said the deal creates “America’s first large-scale integrated natural gas producer.”
• EQT was the worst-performing creator in the S&P 500 on Monday, down 8.2% in early-afternoon trading.

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

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

EQT said the merger creates “America’s sooner large-scale, integrated natural gas producer.” CEO Toby Rice called it “the most strategic and transformational transaction” ever stalked 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 authentic gas resource bases anywhere in the world.” The combined company is expected to be valued at more than $35 billion.

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

The companies preclude 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 do business near their best levels in more than two years. EQT shares were down 8.2% to $34.45 and contain lost more than 10% so far in 2024.

Read the original article on Investopedia.