The combined company is set to operate an extensive pipeline infrastructure and hold reserves
Kirkland & Ellis advised EQT Corporation on a merger with Equitrans Midstream Corporation valued at over $35 billion.
According to the law firm, the merger marks a strategic consolidation in the natural gas sector, aiming to create an integrated enterprise of unparalleled scale and efficiency. The transaction, which will see Equitrans shareholders receiving 0.3504 shares of EQT common stock for each Equitrans share, implies a $12.50 per share value based on EQT's stock price as of March 8. Post-merger, EQT shareholders are expected to own approximately 74 percent of the new entity, with Equitrans shareholders owning the remainder.
This merger, receiving unanimous approval from both companies' boards, is slated for completion in the fourth quarter of 2024. It awaits regulatory bodies' green light, approval from shareholders, and fulfillment of other standard closing conditions.
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Toby Z. Rice, president and CEO of EQT, characterized the merger as a pivotal step for EQT, stating, "Equitrans is the most strategic and transformational transaction EQT has ever pursued, and we see this as a once-in-a-lifetime opportunity to vertically integrate one of the highest quality natural gas resource bases anywhere in the world.”
Rice added, “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. We have identified multiple, high confidence near-term synergies, with significant upside from future infrastructure optimization projects that we believe will drive material value creation for shareholders over time."
Thomas F. Karam, executive chairman of Equitrans Midstream, commented, "This strategic transaction with EQT is the culmination of an exhaustive process conducted by the ETRN board to determine the best strategic path forward for our shareholders, employees, and stakeholders.” Karam also emphasizes the merger's role in delivering fair value to Equitrans shareholders and its potential for future value growth under EQT's strategic direction.
The combined company is set to operate an extensive pipeline infrastructure and hold substantial reserves, positioning itself as a leader in natural gas production. The merger aims to optimize cost structures and ensure robust cash flow across commodity cycles, aligning with the companies' strategic visions for growth and competitiveness in the energy sector.
The Kirkland team that advised on the transaction was led by corporate partners David Feirstein, Cy Jones, Jennifer Gasser and Steven Choi; capital markets partners Matt Pacey and Lanchi Huynh; executive compensation partners Stephen Jacobson and Jared Whalen; debt finance partners Rachael Lichman and Chad Davis; real assets partner Chad Smith; tax partners Dean Shulman, Sara Zablotney and Joe Tobias.
