EQT agreed to buy Range Resources in an all-stock deal that gives Range shareholders 0.987 EQT shares for each share they own, the two companies said in a joint release on Monday. Range holders would own about 27 per cent of the combined company.
Both companies produce gas in the Appalachian Basin; EQT is based in Canonsburg, Pennsylvania, and Range in Fort Worth, Texas. The release does not put a price on the deal. Our arithmetic does, and it shows what the market thinks of the bargain.
What is EQT paying?
About $12.8 billion at Friday's prices, or a premium of roughly 21 per cent. EQT closed at $55.63 on 23 October and Range at $45.52, according to market data compiled by Yahoo Finance. At 0.987 EQT shares, each Range share was worth $54.91 at those prices, 20.6 per cent above where it traded.
Range reported 233.7 million shares outstanding on its latest quarterly filing, which converts into about 230.6 million new EQT shares. Set against the 625.5 million EQT shares on its own latest filing, that gives Range holders 26.9 per cent of the combined company, consistent with the "approximately 27%" in the release. Adding the $867 million of long-term debt Range carried at 30 June puts the implied transaction value near $13.7 billion. Those figures are this publication's calculation, not the companies'.
What do the companies say they get?
Scale and savings. The release says the combined producer would have more than 9 billion cubic feet equivalent a day of net production, more than 30 years of drilling inventory across nearly 3 million net acres, more than 3,700 miles of midstream pipelines and a pro forma enterprise value of "more than $50 billion." It targets $325 million of annual synergies within two years, from corporate costs, operations and commodity marketing, and describes a "pathway" to more than $600 million from development planning, infrastructure and "improved marketing margins" on gas, liquefied natural gas and natural gas liquids.
"This transaction brings together two of the highest-quality, longest-duration asset bases in North America," Toby Rice, EQT's president and chief executive, said in the release. Dennis Degner, Range's chief executive, said the deal "creates opportunities to build long-term value neither could fully realize independently." Degner and one other Range representative would join EQT's board; EQT's management would run the company from Canonsburg, Pennsylvania.
Does the premium pay for itself?
Only slowly, on the base case. By this publication's arithmetic, the premium compares with the savings and with Monday afternoon's share prices as follows.
- Implied value per Range share at Friday close: $54.91
- Premium to Range's Friday close: 20.6 per cent
- Implied equity value of the offer: about $12.8 billion
- Premium in dollars: about $2.2 billion
- Base-case annual synergies (within two years): $325 million
- Years of base-case synergies to equal the premium: about 6.7
- Years at the $600 million "pathway" figure: about 3.7
- Range share price change, Monday afternoon: +17.3 per cent
- EQT share price change, Monday afternoon: −1.8 per cent
Source: company release; Yahoo Finance prices (intraday on 26 October); this publication's arithmetic. Synergies are pre-tax and undiscounted.
The move on Monday was a split verdict. Range's market value rose by about $1.8 billion and EQT's fell by about $600 million, by our calculation. At the afternoon price of $54.65 for EQT, the offer was worth $53.94 a Range share, about 1 per cent above where Range traded. The market treats the deal as likely to close, and treats EQT's shareholders as the ones paying for it. That is our reading of the prices, not either company's account.
What could stop it?
Votes and the antitrust review. The merger agreement requires approval by the shareholders of both companies and the expiry of the waiting period under the Hart-Scott-Rodino Act, according to EQT's Form 8-K. The companies expect to close in the first quarter of 2027. The agreement's end date is 25 October 2027, extendable to 25 April 2028 if only antitrust or injunction conditions remain.
The break fees are lopsided in dollars and identical in proportion. Range would owe EQT $423 million in certain circumstances, and EQT would owe Range $1.148 billion. By our arithmetic each is 3.3 per cent of the paying company's market value at Friday's close. EQT's larger fee reflects only that EQT is the larger company.
Both companies have cancelled the earnings calls they had scheduled for 28 October and will instead publish third-quarter results after the market closes on 27 October, the release said. Investing.com reported the same terms and an early fall of more than 4.5 per cent in EQT's shares.
What to watch
The deal is a bet on the price of American gas, which has stayed low even as oil surged this year, as this publication reported in October. The companies say the deal brings EQT's unlevered free cash flow breakeven, the Henry Hub price it needs to cover spending, below $2 per million British thermal units, which would let it survive low prices; whether it can sell more gas at better margins depends on export and power demand, including the data-centre buildout. The first test is Tuesday's results, the last stand-alone numbers either company will publish before the votes. The second is whether EQT's share price recovers before shareholders are asked to approve issuing about 231 million new shares.
The exchange ratio, ownership split, combined operating figures, synergy targets, board seats, headquarters, advisers, timetable and the quotations from Toby Rice and Dennis Degner are from the joint news release filed with EQT's Form 8-K on 26 October 2026. Termination fees, the end date and the closing conditions are from the Item 1.01 summary of the merger agreement in EQT's filing the same day. Share counts are from the cover pages of the two companies' Forms 10-Q for the second quarter of 2026, and Range's long-term debt is from its 10-Q balance sheet at 30 June 2026. Share prices are closing and intraday prices compiled by Yahoo Finance. Investing.com's report of 26 October was used to confirm the terms and the early share moves. The implied value, premium, synergy comparison and break-fee ratios are this publication's arithmetic. The analysis is our own.
