The largest natural gas producer in the U.S. said the Federal Trade Commission is asking for more information and documentary materials in connection with a $5.2 billion acquisition the company announced in September.
Pittsburgh-based EQT plans to buy THQ Appalachia, a gas producer backed by Quantum Energy Partners. The cash-and-stock transaction also includes XcL Midstream, which owns about 95 miles of gas pipelines.
EQT, led by CEO Toby Rice, has become a serial acquirer in the past two years as it consolidates holdings across the Marcellus shale basin in the northeast U.S. The company last year bought assets from Alta Resources Development for about $2.9 billion. It also purchased Chevron's assets in Appalachia for $735 million in 2020.
The THQ deal stands to boost EQT's daily output to roughly 6.3 billion cubic feet, the equivalent to nearly 20% of dry gas production in the Appalachia basin.
"We believe failure to close the deal would raise questions in the market about the feasibility of further consolidation in the Appalachian basin and be a negative for the stock," Cameron Bean, an analyst at Scotia Capital, said in a note to clients.
President Joe Biden has made reinvigorating antitrust a cornerstone of his economic policy, signing an executive order promoting competition last summer and selecting two prominent progressives to helm antitrust agencies -- Assistant Attorney General for Antitrust Jonathan Kanter at the Justice Department and Lina Khan at the Federal Trade Commission.
Khan is pushing the FTC to take a tougher approach to market concentration and has said she plans to revive use of the agency's founding statute, which she said allows the agency to tackle behavior that traditional antitrust laws have had trouble addressing.
The FTC's request for more information was disclosed Friday in a company filing. EQT said it has begun talks with the sellers of the assets about a potential extension of the deal's closing date.
Information for this article was contributed by Gerson Freitas Jr. of Bloomberg News (WPNS).