Devon Energy Corp. has agreed to acquire Coterra Energy Inc. for $21.4 billion in stock, creating one of the world’s largest shale companies. The deal gives Coterra stockholders a 12% premium but a slight discount to Friday’s closing price. The merger is expected to close in the second quarter, solidifying their position in the Delaware Basin.

Devon shareholders will own 54% of the combined company, with Coterra shareholders owning 46%. The new company will be a major player in US shale, producing over 1.6 million barrels per day of oil equivalent. Devon and Coterra have tried to merge in the past and have been working hard to make this deal beneficial for investors.

The enterprise value of the deal is $58 billion, generating around $1 billion in pre-tax savings. The combined company will have assets in the Marcellus Shale, US Rockies, Oklahoma, and South Texas. The merger will allow for better capital allocation and potential asset sales post-closure. The Delaware Basin is seen as the centerpiece of the deal.

Kimmeridge Energy Management Co. supports the merger, emphasizing the importance of focusing on the Delaware Basin assets. Jorden will become non-executive chairman of Devon, which will move its headquarters to Houston. The deal is seen as the best option for Coterra’s future, providing them with a strong position in the shale market.

Financial advisers and legal teams are in place for the merger, with Evercore advising Devon and Goldman Sachs & Co. LLC advising Coterra. The deal marks a significant move in the energy industry, consolidating two major players in the shale market.

Read more at Yahoo Finance: Devon Agrees to Buy US Shale Rival Coterra for $21.4 Billion