What is the value of the merger agreement between Diamondback Energy and Endeavour Energy Resources? Diamondback Energy and Endeavour Energy Resources have agreed to a merger valued at $26 billion, consisting of stock and cash, which will establish a major energy company in the Permian Basin.
In a transformative move for the energy sector, Diamondback Energy and Endeavour Energy Resources have unveiled plans to merge in a deal valued at $26 billion. This agreement is set to create a powerhouse in the Permian Basin, the most prolific oil-producing area in the United States.
Diamondback Energy is positioned to acquire Endeavour Energy in a transaction that includes approximately 117.3 million shares of Diamondback common stock and $8 billion in cash. The cash component of the deal will be financed through a combination of Diamondback’s available cash, credit facilities, and potential new debt.
Scheduled to close in the fourth quarter of 2024, the merger is dependent on standard closing conditions, which encompass antitrust requirements and the green light from both companies’ shareholders. The deal has already received a nod of unanimous approval from Diamondback Energy’s board of directors.
Once the merger is finalized, Diamondback Energy shareholders will hold a 60.5% stake in the new entity. Endeavour Energy Resources’ owners are set to claim the remaining 39.5%. The headquarters of the merged company will be established in Midland, Texas, a city at the heart of the Permian Basin.
The board composition will change to reflect the merger, expanding from nine to thirteen members. This expansion will include Endeavour’s CEO, Lance Robertson, former CEO Charles Meloy, and two others chosen jointly by the two companies.
Travis Stice, Diamondback’s chairman and CEO, has emphasized that the amalgamated company’s inventory will stand out in the industry for its caliber and depth. He predicts that this will translate into a robust cash flow bolstered by the lowest cost structure in the industry.
This merger is not just a significant event for the companies involved but also for the broader energy landscape. As stakeholders anticipate the completion of this strategic alignment, the combined entity is poised for a future of robust growth, operational efficiency, and a strengthened position within the competitive Permian Basin market.
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