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8h ago

SM Energy and Civitas Strike $12.8 Billion All-Stock Merger to Build a Larger Permian Producer

The tie-up seeks Permian scale with identified cost savings to lift free cash flow.

Shale is the name of the game.
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Overview

  • Civitas shareholders will receive 1.45 SM Energy shares, with SM issuing about 126.3 million shares in the all-stock deal.
  • Post-close ownership is expected at roughly 52% for Civitas holders and 48% for SM holders, and the company will continue trading as SM Energy (NYSE: SM).
  • SM President and COO Beth McDonald is slated to lead the combined company, SM CEO Herb Vogel plans to retire in March, and SM chairman Julio Quintana will remain chair with a 6–5 board split favoring SM.
  • The companies project about $200 million in annual synergies with potential upside to $300 million and expect pro forma 2025 free cash flow to exceed $1.4 billion.
  • Pro forma second-quarter 2025 output was 526,000 barrels of oil equivalent per day across roughly 823,000 net acres anchored by the Permian, with closing targeted for the first quarter of 2026.