World News – United States – Devon Energy and WPX to combine in a peer-to-peer all-equity merger with an enterprise value of around $ 12 billion

Devon Energy Corp
DVN,
-156%
and WPX Energy Inc
WPX,
068%
said they had agreed to combine in a merger of all-equity equals with an enterprise value of around $ 12 billion The deal was reported earlier by the Wall Street Journal According to Under the deal, WPX shareholders will receive 05,165 Devon common stock for each share owned Devon shareholders will own approximately 57% of the new entity and WPX shareholders will own approximately 43% The deal is expected to close on the first quarter 2021 « The strategic combination will create a leading unconventional oil producer in the US, with an asset base supported by a superior acreage position in the economic core of the Delaware Basin, » the companies said in a statement. Joint press release Merged company to be called Devon Energy and benefit from « improved scale, improved margins, higher free cash flow and strength necessary to accelerate the return of cash to shareholders through an industry first ‘fixed plus variable’ dividend strategy, ”said the statement The transaction should immediately improve all relevant parameters per share during the first year, including earnings, cash flow, free cash flow and net asset value, and be accretive to return on invested capital It will have about $ 1.7 billion in cash and $ 3 billion in capacity on a credit facility expected to close Devon shares jumped 11% ahead of the news release, while WPX rose 18%

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Devon Energy, NYSE: WPX, WPX Energy, NYSE: DVN, Mergers and Acquisitions