EQT to Buy Equitrans in the Next Huge U.S. Gas Deal
EQT says the deal has an enterprise value of more than $35 billion, with annual synergies of $250 million.
Axios is reporting that 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.
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