US EQT to Acquire Natural Gas Producer for $13 Billion

en.Wedoany.com Reported - On October 26, U.S. natural gas producer EQT and Range Resources jointly announced that the two parties have reached a definitive merger agreement under which EQT will acquire Range Resources in an all-stock transaction valued at approximately $13 billion in equity. The combined company is expected to have an enterprise value exceeding $50 billion, with net natural gas production exceeding 9 billion cubic feet equivalent per day. The transaction is expected to close in the first quarter of 2027, subject to regulatory approvals and approval by both companies' shareholders.

Under the agreement, each share of Range Resources common stock held by shareholders will be converted into 0.987 shares of EQT common stock. Based on the share prices prior to the announcement of the transaction, the acquisition consideration is approximately $54.91 per share, representing a 20.6% premium to the closing price on the previous trading day. Upon completion of the transaction, existing EQT shareholders are expected to own approximately 73% of the combined company, while Range Resources shareholders will own approximately 27%. Both companies' boards of directors have approved the transaction.

The acquisition will consolidate the two companies' natural gas development assets in the U.S. Appalachian Basin. Following the merger, the company will have a drilling inventory of more than 30 years across nearly 3 million net acres and will control more than 3,700 miles (approximately 5,955 kilometers) of midstream infrastructure. Natural gas production, gathering and transmission, and marketing operations will be managed by a single group, covering the marketing and sale of natural gas, liquefied natural gas and natural gas liquids products.

According to EQT's published operating plan, the two companies expect to achieve approximately $325 million in annual base synergies within two years after the transaction closes, primarily from the integration of corporate management, production operations and commodity marketing businesses. As natural gas development plans, midstream facility configurations and marketing operations are further integrated, the long-term annual synergy target exceeds $600 million. EQT also expects that the combined company's unlevered free cash flow breakeven natural gas price will fall below $2 per million British thermal units.

The combined company will continue to be operated by EQT's management team, with headquarters remaining in Canonsburg, Pennsylvania. Range Resources will have two representatives on EQT's board of directors, including Range Resources Chief Executive Officer Dennis Degner. EQT expects that, under the near-term commodity price assumptions used in the announcement, the combined company's cumulative free cash flow over the next five years will be approximately $20 billion.