Diamondback Energy And Endeavor Energy Resources Joining Forces In A Deal Valued At $26 Billion
Diamondback Energy and Endeavor Energy Resources have announced a definitive merger agreement valued at approximately $26 billion on February 12, 2024. This merger is a significant event in the energy industry, with the potential to reshape the landscape of oil and gas production in the United States.
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Deal Size and Structure
The deal is valued at $26 billion, which includes Endeavor’s net debt. The transaction will consist of approximately 117.3 million shares of Diamondback common stock and $8 billion in cash. After the merger, Diamondback shareholders will own about 60.5% of the combined company, and Endeavor stakeholders will hold around 39.5%.
Impact on the Industry
The combined company will become the third-largest oil and gas producer in the Permian Basin, a major oil and gas producing region in Texas and New Mexico. This merger is expected to create a “juggernaut” in the oil and gas industry, setting a new standard for production and efficiency.
The new entity is expected to achieve annual synergies of $550 million, resulting in over $3 billion in net value over the next decade. In addition, Diamondback also announced a 7% increase to its base dividend to $3.60 per share annually, effective from the fourth quarter of 2023. This demonstrates the financial strength and confidence of the new entity.
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions and regulatory approvals. This timeline provides both companies with ample opportunity to ensure a smooth transition and integration process.
The merger between Diamondback Energy and Endeavor Energy Resources represents a significant milestone in the energy industry. With a combined value of $26 billion, the new entity is poised to become a leading player in the Permian Basin. The deal not only signifies the growth and consolidation of the oil and gas industry but also highlights the increasing value and importance of efficient and sustainable energy production.
Please note that this article is for informational purposes only and does not constitute financial advice. Always do your own research and consult with a professional before making any financial decisions.