Devon Energy and Coterra Energy to merge in $58bn all-stock deal

Core Viewpoint - Devon Energy and Coterra Energy are merging in an all-stock transaction, creating a significant player in the US shale industry with an estimated combined enterprise value of $58 billion [1] Group 1: Merger Details - The merger has been unanimously approved by the Boards of Directors and is expected to be finalized in the second quarter of 2026, pending regulatory and shareholder approvals [2] - Coterra Energy shareholders will receive 0.7 shares of Devon Energy common stock for each share they own, resulting in Devon Energy shareholders owning approximately 54% and Coterra Energy shareholders about 46% of the new entity on a fully diluted basis [2] Group 2: Synergies and Operational Strategy - The merger aims to achieve $1 billion in annual pre-tax synergies through enhanced capital efficiency, optimized capital allocation, and technology integration, which will drive per-share growth in free cash flow and net asset value [3] - The combined production portfolio will exceed 1.6 million barrels of oil equivalent per day, supported by high-quality acreage in the Delaware Basin [5] Group 3: Leadership and Governance - Post-merger, Devon Energy's president and CEO Clay Gaspar will continue in his role, while Coterra Energy's president and CEO Tom Jorden will become the non-executive chairman [6] - The board will consist of 11 members, with six directors from Devon Energy and five from Coterra Energy [7] Group 4: Financial Implications - The merger is structured to enhance Devon Energy's investment-grade status and reduce future capital costs [6] - The combined entity is expected to drive higher free cash flow and greater shareholder returns beyond what either company could achieve independently [5]