Equitrans Midstream Corporation (NYSE: ETRN) stock rose over 1% on Monday after it penned a merger agreement with EQT Corporation (NYSE: EQT).
EQT Corporation (EQT) has announced its decision to acquire its former subsidiary Equitrans Midstream (ETRN) in an all-stock transaction to form a consolidated natural gas entity valued at over $35 billion.
The merger agreement outlines that each outstanding share of Equitrans common stock will swap for 0.3504 shares of EQT stock, resulting in a valuation of $12.50 per Equitrans share. The transaction is expected to complete in the fourth quarter of 2024.
This development arrives amidst a backdrop of recalibration within the U.S. natural gas landscape. Producers are scaling back output and drilling expenditures in response to an oversupplied market that has driven commodity prices to historic lows.
This move by EQT follows closely on the heels of Chesapeake Energy’s $7.4 billion bid for Southwestern Energy in January.
EQT CEO Toby Rice stated,
“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.”
Equitrans is the lead partner and operator of the Mountain Valley natural gas pipeline, the sole major gas pipeline currently under construction in the U.S. Northeast. However, the project has faced numerous regulatory and legal challenges, leading to multiple work stoppages since its inception in 2018.
Equitrans, formerly the pipeline division of EQT, emerged as a separate entity in 2018 following the company’s decision to split into two distinct entities. This restructuring separated its midstream operations from its gas production business.
EQT operates primarily in the Marcellus and Utica Shales within the Appalachian Basin, making it the largest natural gas producer in the United States.
Equitrans Midstream (NYSE: ETRN) Stock Movement
ETRN stock gained 1.52% to close at $11.32 on Monday. The traders had exchanged hands with 50,928,315 (50.92 million) shares compared to the average daily trading volume of 3.78 million.
