Diamondback Energy (FANG) and Endeavor Energy Resources said Monday that they have entered into a $26 billion merger agreement to create a large energy firm focused on the Permian Basin in Texas.
Under the terms of the deal, Diamondback Energy is acquiring Endeavor Energy for approximately 117.3 million shares of its common stock and $8 billion of cash, subject to customary adjustments. The deal is expected to close in the fourth quarter of 2024, subject to customary closing conditions that include antitrust requirements and approval by stockholders. The acquisition has already been unanimously approved by Diamondback Energy’s board of directors.
Diamondback Energy will finance the cash portion of the acquisition with cash on hand, its existing credit facilities, and possibly, proceeds from term loans and senior notes offerings, a statement said.
Once the deal closes, Diamondback Energy shareholders are expected to retain 60.5% of the merged entity, which will be headquartered in Midland, Texas, while Endeavor Energy Resources’ owners are to hold the rest.
Diamondback Energy’s board of directors will expand from 9 to 13 members including Endeavor’s Chief Executive Lance Robertson, former Chief Executive Charles Meloy, and two other individuals mutually agreed upon by the companies.
Travis Stice, chairman and chief executive of Diamondback Energy, said the combined company’s inventory “will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure.”
