EQT Corporation (NYSE: EQT) and Equitrans Midstream Corporation (NYSE: ETRN) have officially announced their entry into a definitive merger agreement, marking the creation of a premier vertically integrated natural gas enterprise. With an initial enterprise value exceeding $35 billion, this union positions the combined entity as a formidable contender in the global energy arena, uniquely positioned to lead the American energy landscape. Boasting a peer-leading cost of supply, resilient free cash flow across all market conditions, and substantial synergy prospects, the newly formed company is poised for sustained competitiveness and value generation.

This strategic move by EQT represents a landmark transaction, characterized by its strategic significance and transformative potential. Recognizing the evolving dynamics of the global natural gas market, EQT views this merger as a pivotal opportunity to vertically integrate a top-tier natural gas resource base, aligning with the imperative for U.S. energy companies to compete effectively on the international stage against vertically integrated competitors. The merger is underpinned by the identification of multiple near-term synergies, coupled with the anticipation of substantial upside from future infrastructure optimization initiatives, aimed at delivering substantial value enhancement for stakeholders over the long term.

The transaction with EQT represents the culmination of a rigorous evaluation process conducted by the Equitrans board, designed to discern the optimal strategic pathway for shareholders, employees, and stakeholders alike. The integration with EQT heralds the creation of a premier vertically integrated natural gas powerhouse, poised to redefine the natural gas landscape in the Appalachian Basin and beyond. The merger is structured to ensure equitable value realization for Equitrans shareholders while offering the opportunity to partake in the future value accretion as EQT executes its strategic vision. The Equitrans team takes pride in their contributions to building one of the preeminent midstream companies in the Appalachian Basin and eagerly anticipates the promising future alongside EQT.

Per the terms of the merger agreement, which received unanimous approval from both companies' boards, EQT will acquire Equitrans through an all-stock transaction. Following the transaction, EQT's existing shareholders are anticipated to hold approximately 74% of the combined company's shares, while Equitrans shareholders are expected to retain around 26%.

The completion of the transaction, slated for the fourth quarter of 2024, remains subject to requisite regulatory approvals and clearances, the endorsement of the transaction by shareholders of both EQT and Equitrans, and fulfillment of other customary closing conditions. Notably, the closing of the transaction is contingent upon the Federal Energy Regulatory Commission (FERC) authorizing the Mountain Valley Pipeline (MVP) to commence service. Post-closing, three representatives from Equitrans will join EQT's Board of Directors, ensuring continuity and effective governance. Additionally, EQT's executive management team will lead the amalgamated entity, with headquarters retaining its location in Pittsburgh, Pennsylvania.