Mar 11, 2024 - Energy & Environment

EQT to buy Equitrans in the next huge U.S. gas deal

Illustration of a worker turning a gas pump vent handle, set against graphic shapes and colors

Illustration: Annelise Capossela/Axios

Natural gas production heavyweight EQT Corp. is buying the big pipeline player Equitrans Midstream Corp. for $5.5 billion in stock., the latest in a wave of multibillion-dollar deals sweeping the U.S. oil and gas sector.

The details: Equitrans assets include majority ownership of the major Mountain Valley Pipeline project in West Virginia and Virginia.

  • EQT says the deal has an enterprise value of more than $35 billion, with annual synergies of $250 million.

State of play: Creating the integrated company in the Appalachian Basin allows EQT to "thrive" amid gas price volatility, the companies said.

  • The cash flow created from the deal will help the company pay down more than $5.0 billion of near-term debt.

Thought bubble, via Axios Pro's Michael Flaherty: "Pipeline deals are hot right now. Natural gas prices have stabilized, pushing a wave of consolidation among producers and transporters."

Zoom in: Under the terms of the agreement, EQT will acquire Equitrans in an all-stock transaction, with an exchange carrying an implied value of $12.50 per Equitrans share.

  • EQT's existing shareholders are expected to own around 74% of the combined company and Equitrans' shareholders are expected to own approximately 26%.

The intrigue: It reunites EQT with Equitrans, a company it spun off in 2018. Equitrans stock jumped over 9% in pre-market trading.

Catch up quick: The North American industry is seeing a series of tie-ups spanning producers and pipeline companies.

  • The latter includes ONEOK's roughly $19 billion acquisition last year of Magellan Midstream Partners.

What's next: More U.S. deals, probably.

Editor's note: This story was updated to provide additional details of the transaction.

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