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Shares of Equitrans jumped more than 8% in premarket trading,
while EQT was down about 1%.
Under the terms of the merger agreement, each outstanding share
of Equitrans common stock will be exchanged for 0.3504 shares of
EQT stock, representing a value of $12.50 per Equitrans share.
The transaction is expected to close during the fourth quarter
of 2024.
The deal comes at a time when U.S. natural gas producers are
curbing their output and spending on drilling activity as an
oversupplied market has brought the prices of the commodity down
to multi-decade lows.
The transaction closely follows rival Chesapeake Energy's $7.4
billion bid for Southwestern Energy in January.
"As we enter the global era of natural gas, it is imperative for
U.S. natural gas companies to evolve their business models to
compete on the global stage against vertically integrated
rivals," EQT CEO Toby Rice said in a statement.
Equitrans is the lead partner and operator of the Mountain
Valley natural gas pipeline, the only big gas pipeline under
construction in the U.S. Northeast. It has encountered numerous
regulatory and court fights that have stopped work several times
since construction began in 2018.
It is the former pipeline business of EQT which was spun out
when the company in 2018 split into two, separating its
midstream operations from the gas production business.
EQT is the largest U.S. natural gas producer, which has
operations focused in the cores of the Marcellus and Utica
Shales in the Appalachian Basin.
The deal was first reported by Wall Street Journal earlier on
Monday.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Shilpi
Majumdar)
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