(Oct 26): EQT Corp agreed to buy Range Resources Corp in an all-stock deal for about US$12.8 billion (RM52.26 billion), creating what it says will be the largest and only vertically integrated US natural gas producer.
The merged company will pump more than nine billion cubic feet equivalent of daily production in Appalachia, where both companies are big operators. It will hold over 30 years of drilling inventory across nearly three million net acres. EQT expects US$325 million in annual savings within two years.
EQT chief executive officer Toby Rice is pushing to build a US gas giant with the scale to sell directly to LNG markets and power plants. A self-styled “shalennial,” Rice took control of the company in 2019 after a proxy fight. He has turned the driller into an integrated producer, adding assets across the region and re-merging with a pipeline operator in 2024.
The deal also comes as US natural gas production continues to grow, outpacing the increase in oil output. Gas has emerged as a key energy source to generate power for the artificial intelligence (AI) boom. EQT and Range’s combined assets are adjacent to Data Center Alley, a part of Northern Virginia that has become a popular location for data centres.
“This transaction comes at a pivotal moment for America’s economy, as a convergence of modern industry and energy ushers in a new era of growth,” Rice said on a call with analysts on Monday. “Nowhere is this transformation more evident than in Appalachia.”
Shares of Range Resources climbed 9.4% to US$49.86 at 8.33am in New York in pre-market trading. EQT shares were down 8.4%.
Range shareholders will receive 0.987 EQT shares for each share held and will own about 27% of the combined company, according to a statement. EQT is paying a takeover premium of about 20% to Range’s closing share price last Friday, according to Bloomberg Intelligence analyst Vincent Piazza.
The transaction is expected to close in the first quarter of 2027, subject to shareholder and regulatory approvals. Citigroup Inc and RBC Capital Markets LLC are financial advisers to EQT. Kirkland & Ellis LLP is EQT’s legal counsel. Evercore Inc is lead financial adviser to Range and JP Morgan Securities LLC also advised the company, while Gibson, Dunn & Crutcher LLP is its legal counsel on the deal.
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