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Diamondback Energy (NASDAQ: FANG) and closely held Endeavor Energy Resources are close to a deal that would combine two Permian Basin rivals and create a company valued at more than $50 billion.
Diamondback (FANG) May Announce Deal So Soon like Monday, according to a Wall Street Journal report on Sunday, which cited people familiar with the matter.
The all-stock and cash transaction would value Endeavor at about $25 billion, with Diamondback (FANG) shareholders owning the majority of the combined entity after the deal closes, the WSJ reported. Diamondback has a market capitalization of around $27 billion.
Diamondback (FANG) faced competition from ConocoPhillips (COP) and others in its bid to buy Endeavor, according to the report.
A possible tie-up between Diamondback Energy and Endeavor comes after Reuters reported in December that Endeavor was evaluating a sale that would value the Permian Basin's largest private oil and gas producer at $25 billion to $30 billion.
Endeavor has evaluated offers in the past, including in 2018, Reuters has reported in the past. There have been contacts from multiple interested parties in recent times, prompting the privately held company to consider a sale at this time.
The deal between Endeavor and Diamondback (FANG) follows a flurry of M&A activity in the Permian Basin, including Occidental's (OXY) announced $12 billion purchase of CrownRock in December and its planned acquisition by Exxon Mobil (XOM) for $59.5 billion from Pioneer Natural Resoruces, which was announced in October.
