Crescent Energy Company is set to acquire Vital Energy in a $3.1bn all-stock deal, enhancing its position in the energy sector with a focus on cash flow and capital allocation. Vital shareholders will receive a premium in Crescent stock shares. The merger promises value with estimated annual synergies of $90m-$100m.

The deal aims to boost free cash flow, cash flow from operations, and net asset value per share for Crescent Energy. The company plans reduced activity for heightened cash flow and a leading dividend payout. It will create the largest liquids-weighted producer without investment grade status.

Crescent’s acquisition of Vital will establish a significant asset portfolio with a strong focus on the Eagle Ford, Permian, and Uinta Basins. Crescent’s chairman sees the deal as an opportunity for future growth through non-core divestitures. Crescent shareholders will own 77% of the merged entity post-completion.

Both Crescent and Vital’s Boards of Directors have approved the transaction, with significant shareholder support. The deal is subject to customary closing conditions and is expected to finalize by year-end. Following the merger, Crescent will remain headquartered in Houston, with financial advisors and legal counsels already engaged.

This merger follows Crescent Energy’s previous acquisition of Eagle Ford assets from Ridgemar Energy for $905m. The deal is expected to close by the end of this year, pending shareholder and regulatory approvals. Financial advisors and legal counsels are in place for the transaction, with a strategic focus on growth and value creation.

Read more at Yahoo Finance: Crescent Energy to acquire Vital Energy in all-stock transaction