SM Energy and Civitas Resources announce $12.8bn merger

Core Points - SM Energy Company and Civitas Resources are merging in an all-stock transaction valued at approximately $12.8 billion, including net debt [1][2] - The merger will create a combined entity with a portfolio of around 823,000 net acres, primarily focused on the Permian Basin [1] - Civitas shareholders will receive 1.45 shares of SM Energy stock for each Civitas share held [1][2] Transaction Details - The combined entity's enterprise value stands at $12.8 billion based on the exchange ratio and closing share prices on October 31, 2025 [2] - SM Energy will issue approximately 126.3 million shares of common stock as consideration for the merger [2] - The transaction has been unanimously approved by both companies' boards and is expected to close in the first quarter of 2026, pending shareholder and regulatory approvals [2] Ownership Structure - Upon closing, SM Energy shareholders will hold around 48% of the combined company, while Civitas shareholders will own approximately 52% [3] - The merged entity will operate under the SM Energy name and be headquartered in Denver, Colorado [3] Leadership and Governance - Julio Quintana will be appointed as non-executive chairman, while Herb Vogel will serve as CEO of the combined company [5] - The combined company's Board of Directors will consist of 11 members, with six from SM Energy and five from Civitas [4] Strategic Vision - The merger is seen as a strategic combination that enhances scale, creates value-adding synergies, and generates significant free cash flow [3][6] - The combined entity aims to deliver free cash flow and sustained capital returns across high-return US shale basins [5][6]