08:11 AM EDT, 03/11/2024 (MT Newswires) -- EQT (EQT) said Monday it was acquiring Equitrans Midstream ( ETRN ) , a company it spun off about six years ago, in an all-stock deal to create a natural gas production and distribution company valued initially at $35 billion.

The merger agreement has been approved by the boards of both companies and is expected to close in Q4 pending regulatory clearances, shareholders' approval, and other customary conditions, EQT said, adding the deal is contingent on Federal Energy Regulatory Commission authorization of Equitrans' Mountain Valley Pipeline Project to commence service.

Under the terms of the deal, each outstanding share of Equitrans common stock will be exchanged for 0.3504 share of EQT common stock, a valuation of $12.50 per Equitrans share based on the volume-weighted average price of EQT common stock for the 30 days ended March 8. Upon completion of the deal, EQT shareholders are expected to own about 74% of the combined company and Equitrans the rest.

EQT said the deal would create $250 million in annual synergies and potentially unlock up to more than $175 million in savings. It would also be "significantly accretive" to cash flow per share and projected 2025 to 2029 free cash flow generation of about $16 billion at recent natural gas prices, according to EQT.

EQT shares were down 3.7% in recent Monday premarket activity, while Equitrans shares were up 8.7%.

Price: 36.14, Change: -1.38, Percent Change: -3.68