Big energy deals are back. On Monday, EQT, the Pennsylvania-based natural gas producer, agreed to buy rival Range Resources in an all-stock deal that creates a company with an enterprise value of more than $50 billion. Range shareholders will get 0.987 EQT shares for every share they own. When it's done, EQT's current owners will hold about 73% of the combined company and Range's about 27%.
The scale is huge. Together, the two will produce more than 9 billion cubic feet equivalent of gas a day, with over 30 years of drilling inventory, close to 3 million net acres and more than 3,700 miles of pipeline and other midstream infrastructure. EQT CEO Toby Rice and his team will run the combined business from EQT's headquarters in Canonsburg, Pennsylvania, and two people from Range, including CEO Dennis Degner, will join EQT's board.
So why do it? Mostly cost and staying power. The companies expect $325 million in yearly savings within two years, with a path to more than $600 million over time. They say the merged company can break even on free cash flow with gas prices under $2, and they're projecting roughly $20 billion in free cash flow over five years at recent prices. Investors liked it, at least on Range's side. Its stock jumped around 16%, according to TheStreet.
The timing is interesting too. Electricity demand keeps climbing, and much of that power comes from natural gas, so owning a giant, cheap supply looks like a smart long-term bet. Regulators and shareholders of both companies still need to sign off, and the deal is expected to close in the first quarter of 2027.
Are mega-mergers like this good for keeping energy affordable, or does less competition end up costing all of us?