Diamondback Energy, Inc. (NASDAQ: FANG) and QEP Resources (NYSE: QEP) Resources jointly reported the closing of a definitive agreement under which Diamondback will acquire QEP with a purchase price of approximately $2.2 billion, which includes QEP’s debt of roughly $1.6 billion at September 30, 2020. The consideration will consist of 0.05 common shares of Diamondback stock for every common share of QEP stock. This represents an implied value of approximately $2.29 per common share for each QEP stockholder based on the closing price of Diamondback common stock on December 18, 2020. The deal between the two companies was unanimously approved by the respective Board of Directors of both firms.
The transaction details are as follows:
Based on the terms of the definitive merger agreement, QEP’s stockholders will receive 0.05 shares of Diamondback common stock for each share of QEP common stock, a value of $2.29 per share on December 18, 2020. Diamondback stockholders will own approximately 92.8% of the combined company, including shares issued in the previously announced acquisition of assets from Guidon, and QEP stockholders will own approximately 7.2%.
Diamondback is expected to maintain its Investment Grade credit rating pro forma for the transaction and maintain its commitment on a conservative financial management basis.
The transaction has been unanimously approved by the Diamondback and QEP Boards of Directors, and completion is expected to occur in the first half of 2021, contingent on certain QEP stockholders’ approval, certain regulatory approvals, and other customary closing conditions.
Diamondback’s Board of Directors and management staff will stay intact following closure. Besides, the company will proceed to have its offices in Midland, Texas.