EQT Corp said on Monday that it would acquire Range Resources in an all-stock deal valued at more than $50 billion, including debt.
The companies said the deal would create the largest vertically integrated natural gas producer in the United States.
Under the agreement, Range Resources shareholders will receive 0.987 shares of EQT Corp for every Range Resources share they own. The deal values Range Resources at about $12.83 billion, based on a Reuters calculation using the company’s 233.68 million outstanding shares, according to LSEG data. The deal implies a price of $54.91 for each Range Resources share. This is about 20.6% higher than Range Resources’ closing share price on Friday, according to Reuters’ calculations. EQT shares fell 4.6% in premarket trading on Monday after the announcement. In contrast, Range Resources shares rose 10.1% in premarket trading. The merged company is expected to produce more than 9 billion cubic feet of natural gas equivalent per day. It will also control nearly 3 million net acres in the Appalachian Basin, a major natural gas-producing region in the United States, the companies said. The combined business will have more than 30 years of drilling inventory. It will also own about 3,700 miles of midstream infrastructure, which supports the transportation and handling of natural gas , according to the companies. After the deal closes, EQT shareholders will own about 73% of the combined company, while Range Resources shareholders will hold the remaining 27%, the companies said. The transaction is expected to be completed in the first quarter of 2027. EQT said the acquisition would lower its free cash flow breakeven to below $2 per million British thermal units (MMBtu). EQT expects the combined business to generate about $325 million in annual savings within two years of the deal.
However, it still requires regulatory approvals and approval from shareholders of the companies, according to the announcement. They will include Range Resources CEO Dennis Degner, the companies said. The company’s headquarters will remain in Canonsburg, Pennsylvania, according to the companies. This means the company expects to generate cash at a lower natural gas price than before, according to Reuters. The savings are expected to come from improvements in corporate operations, production activities and marketing, the company said.
Demand for natural gas from data centres has improved the outlook for the US natural gas industry. Producers are looking to increase output, expand their drilling inventories and strengthen their marketing capabilities to benefit from this demand. Once the deal closes, two representatives from Range Resources will join EQT’s board of directors. EQT’s existing executive management team will lead the merged business.
