PITTSBURGH - EQT Corporation (NYSE: NYSE:EQT (ST:EQTAB)) and Equitrans Midstream Corporation (NYSE: NYSE:ETRN) have announced a definitive all-stock merger agreement, positioning the combined entity as America's first large-scale, integrated natural gas producer, with an enterprise value exceeding $35 billion.
This strategic move aims to enhance EQT's competitive edge in the global market by creating a vertically integrated company with over 2,000 miles of pipeline infrastructure and substantial cost synergies.
EQT's President and CEO, Toby Z. Rice, highlighted the strategic significance of the merger, emphasizing the high-quality natural gas resource base and the potential for value creation for shareholders. He expressed confidence in the company's ability to integrate operations and capture synergies efficiently. Thomas F. Karam, Executive Chairman of Equitrans, echoed the sentiment, noting the transaction's benefits for ETRN shareholders and the promising future with EQT.
The merger is expected to yield annual synergies of $250 million, with a potential increase to over $425 million. These savings will stem from reduced financial and corporate costs, production optimization, and lower capital and operating expenses. The integration is also projected to significantly enhance free cash flow per share, with a forecasted cumulative free cash flow generation of approximately $16 billion from 2025 to 2029 at recent strip prices.
Under the terms of the agreement, each outstanding share of Equitrans common stock will be exchanged for 0.3504 shares of EQT common stock. Post-transaction, EQT's existing shareholders will own roughly 74% of the combined company, with Equitrans' shareholders holding about 26%. The deal is slated to close in the fourth quarter of 2024, subject to regulatory approvals, shareholder consent, and other customary closing conditions.
The combined company will remain headquartered in Pittsburgh, Pennsylvania, with EQT's executive management team at the helm and three representatives from Equitrans joining EQT's Board of Directors.
This news is based on a press release statement and does not constitute financial advice or an endorsement of the companies' claims. The transaction details and the anticipated benefits of the merger reflect the companies' perspectives and are subject to the successful completion of the merger.
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