EQT to Acquire Range Resources in All-Stock Deal Valued by Reuters at $12.83 Billion
Key Facts
EQT agreed to acquire Range Resources in an all-stock deal that Reuters valued at about $12.83 billion, or $54.91 per share, based on its calculations. The estimated value represents a 20.6% premium to Range's closing share price on the Friday before the announcement. Under the agreement, Range shareholders will receive 0.987 EQT shares for each share they own. After the deal closes, EQT shareholders are expected to own about 73% of the combined company, compared with 27% for Range shareholders, on a fully diluted basis. The deal brings two Appalachian gas producers together under one entity, with a larger asset base and greater production.
The companies expect the combined entity's net production to exceed 9 billion cubic feet equivalent per day after the merger. They also say the development portfolio will provide more than 30 years of inventory across about 3 million net acres. The assets include more than 3,700 miles of midstream gas infrastructure, connecting production with transportation and marketing. This scale would put the group ahead of rival Expand Energy, which produced about 7.2 billion cubic feet equivalent per day in 2025. Expand expected production of between 7.4 billion and 7.6 billion cubic feet equivalent per day in 2026, according to Reuters.
The deal is underpinned by expectations of rising gas demand, particularly in Appalachia, where EQT raised its estimate of potential demand to 25 billion cubic feet per day from a previous estimate of 20 billion. Reuters attributed the estimate to Chief Executive Toby Rice. The U.S. Energy Information Administration also expects domestic gas consumption to rise from 91.9 billion cubic feet per day in 2025 to 94.3 billion in 2027. Reuters noted that growth in liquefied natural gas exports and the needs of AI data centers are supporting demand. Rice said future production growth "will be driven by customer demand rather than production targets," adding that growth in the mid-single digits is possible.
EQT expects to achieve $325 million in annual base synergies within two years of closing the deal, with a path to raising synergies to more than $600 million over the long term. The companies identified corporate functions, operations and commodity marketing as sources of the savings. Opportunities to improve, according to the joint disclosure, include infrastructure development and more efficient development operations. They also aim to increase margins from marketing natural gas, liquefied natural gas and natural gas liquids. The companies forecast cumulative free cash flow of about $20 billion over the next five years, based on recent market prices.
Trading showed a divergence between the two companies in activity reported by Reuters on October 26. Range shares rose 15.1% to $52.43, while EQT shares fell 3.7%. Range shares had closed at $45.52 on October 23, before the deal was announced. At $52.43, the stock remains below the implied value of $54.91 per share that Reuters calculated for the offer. This value differs from the trading price cited in the agency's coverage: the former is an estimate of the consideration's value under the deal terms, while the latter is the market price of the stock.
Closing the deal remains subject to approval by both companies' shareholders and the completion of regulatory and procedural requirements. These include the expiration or termination of the waiting period under the Hart-Scott-Rodino antitrust law. The companies expect to close the deal in the first quarter of 2027, subject to obtaining the required approvals and satisfying customary closing conditions. After closing, the group's ability to turn its production scale and assets into the synergies and cash flows it announced will be measured. Rice said the expanded asset base supports long-term supply contracts and linking future production growth to customer demand.