EQT to Buy Range Resources in All-Stock Deal Creating US Gas Producer Valued Above US$50 Billion

EQT Corp has agreed to acquire fellow natural gas producer Range Resources in an all-stock transaction that would give the combined company a pro forma enterprise value of more than US$50 billion, the companies announced on Monday (Oct 26).

Deal terms

Under the definitive merger agreement, Range shareholders will receive 0.987 EQT share for each Range share they own. On completion, existing EQT shareholders will hold about 73% of the enlarged company and Range shareholders about 27%. The boards of both companies approved the deal unanimously, according to EQT’s statement.

The companies did not state a per-share price or premium. A Reuters calculation, cited by Global Banking & Finance Review, put the equity value at US$12.83 billion, or US$54.91 per Range share, about 20.6% above Range’s closing price on Friday.

Range shares rose US$7.42, or 16.31%, to US$52.94 on the New York Stock Exchange in Monday morning trading, a 52-week high, IBTimes reported. EQT shares fell in early trading, with Analytics Insight reporting a decline of about 4%.

Combined company

EQT said the combined group would produce more than 9 billion cubic feet equivalent per day, net, from nearly 3 million net acres, with more than 30 years of drilling inventory and more than 3,700 miles of midstream infrastructure. It put the unlevered free cash flow breakeven at below US$2 per million British thermal units, based on average Henry Hub prices.

The company is targeting US$325 million in annual base synergies within two years, spanning corporate costs, operations and commodities marketing, and sees a pathway to more than US$600 million over the long term. It projected cumulative free cash flow of about US$20 billion over five years at recent strip pricing, and said the combined company would have BBB-quality credit metrics at closing.

EQT President and CEO Toby Rice said the deal combines “two of the highest-quality, longest-duration asset bases in North America.” Range President and CEO Dennis Degner said the transaction would position shareholders to benefit from what he described as a constructive long-term outlook for natural gas and natural gas liquids.

EQT’s executive management team will run the combined business, which will keep its headquarters in Canonsburg, Pennsylvania. Two Range representatives, including Degner, will join EQT’s board when the deal closes. Range is currently based in Fort Worth, Texas.

What’s next

The transaction is expected to close in the first quarter of 2027, subject to regulatory approvals and clearances, approval by shareholders of both EQT and Range, and other customary conditions. EQT plans to file a Form S-4 registration statement containing a joint proxy statement and prospectus.

Both companies have cancelled their third-quarter earnings calls scheduled for Oct 28 and will instead release third-quarter results after the market close on Oct 27. Citi and RBC Capital Markets are advising EQT, with Kirkland & Ellis as legal counsel, while Evercore is lead financial adviser to Range, alongside J.P. Morgan Securities, with Gibson, Dunn & Crutcher as its legal counsel.

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