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(Reuters) – U.S. shale producer Crescent Energy said on Monday it would acquire smaller peer Vital Energy in an all-stock deal valued at $3.1 billion, including debt.
The deal highlights how some U.S. companies are pursuing scale at a time when mergers and acquisitions in the shale industry slowed in the second quarter due to volatility in the energy and equity markets.
Vital shareholders will receive 1.9062 shares of Crescent common stock for each share held, representing an offer valued at $18.95 per share and a premium of 20%, based on the stocks’ last close.
Shares of Vital Energy were up 9.5% while Crescent Energy was down 2.9% in premarket trading.
Reuters had on Friday, after markets closed, reported on the deal talks, citing people familiar with the matter.
The merger will create one of the 10 largest independent oil and gas producers in the U.S., with positions across the Eagle Ford, Permian and Uinta basins and more than a decade of drilling inventory, the companies said.
The deal, expected to close by the end of 2025, will generate $90 million to $100 million in immediate annual synergies and will boost cash flow per share.
Crescent said it has also lined up a $1 billion pipeline of non-core asset sales to help strengthen its balance sheet.
Crescent shareholders will own about 77% of the combined company and Vital stockholders will own the rest
Reporting by Sumit Saha in Bengaluru; Editing by Sriraj Kalluvila
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