What happened?
Shares of natural gas producer Range Resources (NYSE: RRC) jumped 15.5% in the morning session after EQT Corporation (NYSE: EQT) agreed to acquire the natural gas producer (Range Resources) in an all-stock transaction valued at more than $50 billion including debt.
Under the definitive merger agreement, each share of Range common stock will be converted into 0.987 shares of EQT common stock, the companies announced in a joint press release. The exchange ratio values Range's equity at approximately $12.83 billion, or an implied $54.91 per share, a 20.6% premium above the previous session’s close, per calculations reported by Reuters. EQT shareholders will own roughly 73% of the combined business and Range investors will hold 27% following closing in the first quarter of 2027, according to a regulatory filing.
The combination brings together two Appalachian Basin operators to establish the largest vertically integrated natural gas producer in the United States, with net production exceeding 9 billion cubic feet equivalent per day and more than 3,700 miles of midstream pipelines, the companies stated. EQT expects $325 million in annual synergies within two years and noted the combination will lower its unlevered free cash flow breakeven below $2 per million British thermal units.
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What is the market telling us
Range Resources’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Range Resources and indicate this news significantly impacted the market’s perception of the business.
Range Resources is up 48.8% since the beginning of the year, and at $52.54 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Range Resources’s shares 5 years ago would now be looking at an investment worth $2,014.
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