EQT Corp., the largest U.S. natural gas producer, agreed to buy back its former subsidiary Equitrans Midstream Corp. for about $5.5 billion in all-stock options, Bloomberg News reported on Monday, March 11, 2024. 

EQT Corp’s move is the latest in a wave of consolidation in the oil and gas pipeline industry.

The multi-billion-dollar deal reunites EQT with Equitrans, which was spun off in 2018 following pressure from activist investor Jana Partners. 

Equitrans owns the controversial Mountain Valley Pipeline project, which is due for completion in the second quarter after facing years of delays due to legal challenges and local opposition. 

The pipeline will transport gas from the Marcellus Shale formation in Appalachia, the nation's biggest natural gas basin, to markets in the Southeast.

EQT said the transaction, expected to close in the fourth quarter, will generate $250 million in annual cost savings.

"We see this as a unique opportunity to vertically integrate one of the highest quality natural gas resource bases in the world," EQT CEO Toby Rice said in a statement.

Under the terms of the deal, each outstanding share of Equitrans will be exchanged for 0.3504 of a share of EQT, valuing Equitrans stock at $12.50 per share. EQT shareholders are expected to own about 74% of the combined company.

The agreement adds to a string of recent pipeline acquisitions in North America, including ONEOK Inc.'s purchase of Magellan Midstream Partners LP in September and Energy Transfer LP's takeover of Crestwood Equity Partners LP in November.

Guggenheim Securities LLC is the lead financial advisor to EQT on the transaction, while RBC Capital Markets serves as financial advisor. Barclays Plc and Citigroup Inc. are acting as financial advisors to Equitrans.