Zhi Tong Cai Jing·2025-06-03 13:20Group 1 - Viper Energy has agreed to acquire Sitio Royalties in an all-stock transaction valued at approximately $4.1 billion, including net debt, significantly enhancing its oil and gas asset scale and inventory depth for stable production and cash flow growth over the next decade [1][2] - The transaction structure involves exchanging 0.4855 shares of the new holding company for each share of Sitio Class A common stock, implying a purchase value of $19.41 per share for Sitio shareholders based on Viper's closing price [1][2] - Following the merger, Viper's major shareholder, Diamondback Energy, will hold about 41% of the new company [1] Group 2 - The merger is expected to immediately increase the per-share distributable cash by 8% to 10% [2] - Viper's board has approved a 10% increase in the annual base dividend to $1.32 per share, with the dividend payout expected to represent about 45% of distributable cash at a WTI oil price scenario of around $50 [2] - The merger will enhance Viper's cash flow generation capacity and reduce the breakeven oil price for dividends, making the company's high-dividend, low-capital operating model more attractive [3]