Equitrans Midstream Corporation (NYSE:ETRN) entered into an agreement to acquire the remaining 40.1% stake in EQM Midstream Partners, LP (NYSE:EQM) from EQT Corporation (NYSE:EQT) and others for $1.8 billion on February 26, 2020. Under the terms of the agreement, each outstanding common unit of EQM Midstream Partners, LP will be converted into the right to receive 2.44 shares of Equitrans Midstream Corporation. $600 million or 12.3 million of the series A perpetual convertible preferred units of EQM Midstream Partners, LP issued and outstanding immediately prior to the effective time will be redeemed by EQM Midstream Partners, LP and each of the remaining series A preferred units shall be exchanged for 2.44 shares of a newly authorized and created series of preferred stock, without par value, of Equitrans Midstream Corporation, convertible into ETRN common stock of Equitrans Midstream Corporation. Each outstanding phantom unit relating to a common unit of EQM Midstream Partners, LP issued pursuant to the amended and restated EQGP Services, LLC 2012 long-term incentive plan, dated as of February 22, 2019 (the EQM LTIP), and any other award issued pursuant to the EQM LTIP, whether vested or unvested, will be converted into the right to receive the merger consideration. EQM Midstream Partners, LP will become a wholly owned subsidiary of Equitrans Midstream Corporation. Upon termination of the agreement under certain circumstances, EQM Midstream Partners, LP will be obligated to pay Equitrans Midstream Corporation a termination fee equal to $36.5 million and/or reimburse Equitrans Midstream Corporation for its expenses in an amount not to exceed $10 million. The agreement also provides that upon termination of the agreement under certain circumstances, Equitrans Midstream Corporation will be obligated to reimburse Equitrans Midstream Corporation for its expenses in an amount not to exceed $10 million.

The transaction is subject to approval by the holders of a majority of the outstanding common units of EQM Midstream Partners, LP, class B units, and series A preferred units, with such series A preferred units treated as EQM Common Units on an as-converted basis, voting together as a single class, approval of the Equitrans Midstream stock issuance by a majority of votes cast at a special meeting of holders of shares of Equitrans Midstream Corporation, the effectiveness of a registration statement on Form S-4, approval for listing on the New York Stock Exchange of the shares of Equitrans Midstream common stock issuable pursuant to the transaction, closing of preferred restructuring agreement and Equitrans Midstream Corporation having caused tax counsel to issue the closing opinion in accordance with the tax matters agreement. The transaction has been unanimously approved by the Conflicts Committee of the Board of Directors of the general partner of EQM Midstream Partners, LP and by the Board of Directors of the general partner of EQM Midstream Partners, LP and the Board of Directors of Equitrans Midstream Corporation. Equitrans' shareholders meeting is scheduled on June 15, 2020 and Board of Equitrans recommends the shareholders to vote in favor of the transaction. The Conflicts Committee of EQM Midstream Partners, LP has received the opinion of Evercore Group L.L.C. to the effect that the exchange ratio is fair, from a financial point of view, to EQM Midstream Partners, LP and its unit holders. The Board of Equitrans Midstream Corporation has received an opinion from Guggenheim Securities, LLC to the effect that the exchange ratio provided for in the agreement is fair, from a financial point of view, to Equitrans Midstream Corporation. As of March 10, 2020, Equitrans Midstream Corporation will held an annual meeting of shareholders to approve the transaction. As of June 15, 2020, the shareholders of Equitrans Midstream and EQM Midstream approved the transaction. The terms of the agreement were unanimously approved by the conflicts committee of the Board of Directors of the EQM. The transaction is expected to close in mid-year 2020. As of April 29, 2020, the transaction is expected to close in the second quarter of 2020. As of May 14, 2020, the transaction is expected to close in June 2020. As of June 15, 2020, the transaction is expected to close on June 17, 2020.

McGuireWoods LLP and Ryan J. Maierson and Nick S. Dhesi of Latham & Watkins LLP acted as legal advisors for Equitrans Midstream Corporation. Srinivas M. Raju, Kenneth E. Jackman, and Gregory W. Ladner of Richards, Layton & Finger, P.A. acted as legal advisors for EQM Midstream Partners, LP. Citigroup Global Markets Inc. and Guggenheim Securities, LLC acted as financial advisors for Equitrans Midstream Corporation. Guggenheim Securities, LLC also acted as fairness opinion provider for Equitrans Midstream Corporation. Evercore Group L.L.C. acted as financial advisor and fairness opinion provider for EQM Midstream Partners, LP. Gerald Spedale of Gibson, Dunn & Crutcher LLP acted as legal advisor to Guggenheim Securities, LLC. D.F. King & Co., Inc. acted as proxy solicitor to Equitrans Midstream and EQM Midstream Partners. Equitrans Midstream will pay D.F. King & Co., Inc. a fee of $10,000 and EQM Midstream Partners will pay $7,500 for its services. Equitrans Midstream will pay Guggenheim Securities total cash fees of up to $6,000,000, comprised of $1,500,000 which became payable upon the rendering of Guggenheim Securities' opinion, $1,500,000 which is payable upon consummation of the Merger and a discretionary fee of up to an additional $3,000,000 which may be payable. Evercore will receive a fee of $2 million upon rendering its opinion and Evercore also received a fee of $100,000 upon execution of its engagement letter with the EQM Conflicts Committee (such fee creditable against the $2.0 million fee), and Evercore will be entitled to receive an additional fee of $1 million if the merger is consummated. American Stock Transfer & Trust Company, LLC acted as transfer agent to EQM Midstream Partners. Chad Michael Smith, Matt Pacey and Dean Shulman of Kirkland & Ellis acted as legal advisor for EQT Corp.

Equitrans Midstream Corporation (NYSE:ETRN) completed the acquisition of the remaining 40.1% stake in EQM Midstream Partners, LP (NYSE:EQM) from EQT Corporation (NYSE:EQT) and others on June 17, 2020. EQM Midstream Partners will operate as the wholly owned subsidiary of Equitrans Midstream.