The Federal Trade Commission has taken action to address antitrust concerns arising from a $5.2 billion cash-and-stock agreement between Quantum Energy Partners, a private equity firm, and EQT Corporation, a natural gas producer. FTC has approved a consent order aimed at preventing conflicts of interest and the exchange of competitively sensitive information between the two undertakings.
According to the FTC, Quantum Energy Partners and EQT Corporation are direct competitors operating in the Appalachian Basin, the largest natural gas-producing region in the United States. The proposed acquisition would result in Quantum becoming one of EQT's largest shareholders, granting it a seat on EQT's board of directors. To prevent an anti-competitive interlocking directorate arrangement and to ensure the market is competitive, FTC included several provisions in the consent order:
- Prohibiting Quantum from holding a seat on EQT's board and on the boards of the top seven Appalachian Basin natural gas producers, unless approved by the Commission.
- Requiring Quantum to divest its EQT shares within a specified timeframe.
- Mandating that, while Quantum owns EQT shares, they must be held in a voting trust with decisions made proportionally to other EQT shareholders.
- Restricting Quantum from acquiring additional EQT shares without prior Commission approval.
- Requiring the immediate dissolution of the joint venture between EQT and Quantum known as The Mineral Company.
- Imposing limitations on future collaborations between EQT and Quantum, including noncompete agreements.
- Mandating the creation and maintenance of antitrust compliance programs by EQT and Quantum.
- Appointing a monitor to oversee compliance with the consent order.
(FTC – 16.08.2023)
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