Diamondback Energy (FANG.US) Stocks Surge as Company Announces $26 Billion Acquisition of Endeavor Energy Resources
In an unexpected turn of events, U.S. stocks saw a significant surge on Monday as Diamondback Energy (FANG.US) rose more than 7% to $163.185. The reason behind this dramatic increase was the confirmation of Diamondback’s acquisition of Endeavor Energy Resources for a whopping $26 billion, including Endeavor’s net debt.
The acquisition, which is expected to be completed in the fourth quarter of this year, involves approximately 117.3 million shares of Diamondback common stock and $8 billion in cash, subject to customary adjustments. Diamondback plans to fund the cash portion of the transaction through a mix of its cash reserves, borrowings from credit facilities, and proceeds from the issuance of term loans and senior notes.
Upon completion of the acquisition, Diamondback shareholders are expected to own approximately 60.5% of the combined company, with the remaining 39.5% owned by Endeavor shareholders. Diamondback’s management has emphasized that the combined entity will have a broad and high-quality inventory, which will generate cash flow and boast the most competitive cost structure in the industry.
The news of this major acquisition has sent shockwaves through the energy sector, with analysts and investors closely monitoring the impact this move will have on the market. As Diamondback and Endeavor join forces, all eyes will be on the new entity and its potential to reshape the energy exploration landscape.