Natural gas producer EQT has agreed to buy former pipeline unit Equitrans Midstream for about $5.5 billion. EQT stock tumbled while Equitrans Midstream rose.
EQT will pay 0.3504 share for each Equitrans share, worth $12.50 a share based on Friday's prices. That would be a 12% premium to Equitrans stock's closing price Friday.
Equitrans common stock will be exchanged for 0.3504 share of EQT stock, representing a value of $12.50 per Equitrans share. Equitrans shares closed Friday at $11.15. Pittsburgh-based EQT had a market value of roughly $16.5 billion.
The deal was initially reported by The Wall Street Journal.
EQT is a natural gas producer in the Appalachian Basin. It spun off Equitrans, a midstream pipeline business, in 2018 at the urging of activist investor Jana Partners.
The combined, vertically integrated natural gas firm could reap economies of scale.
Equitrans had said earlier this year that it was working with advisers, citing unnamed suitors.
EQT stock fell 7.25% to 34.80 in early Monday trading. Shares have rebounded somewhat in the past few weeks with natural gas prices, which had plunged. Nat gas prices have rebounded as big producers, including EQT and Chesapeake Energy, curbed output.
Equitrans stock popped 4.5% to 11.65. Shares closed Friday just above a flat-base buy point of 11.
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