SM Energy Company and Civitas Resources have recently announced a merger in an all-stock deal valued at around $12.8 billion, including net debt. This strategic move will result in the formation of a combined entity with a vast portfolio spanning approximately 823,000 net acres, predominantly concentrated in the Permian Basin.
As per the merger agreement’s terms, Civitas’ shareholders will receive 1.45 shares of SM Energy stock for each Civitas share they hold. Taking into account the exchange ratio, the companies’ closing share prices on 31 October 2025, and net debt, the combined enterprise value is estimated at $12.8 billion. In consideration, SM Energy will issue roughly 126.3 million shares of common stock.
Both companies’ boards have unanimously approved the transaction, which is anticipated to be completed in the first quarter of 2026, subject to shareholder and regulatory approvals. Following the merger’s conclusion, SM Energy shareholders will possess approximately 48% of the unified company, while Civitas’ shareholders will retain around 52% ownership.
The merged entity will retain the SM Energy name and have its headquarters in Denver, Colorado, US. CEO of SM Energy, Herb Vogel, expressed excitement about the merger, highlighting the enhanced scale, synergies, and significant free cash flow that will benefit stockholders. He commended Civitas for establishing a leading sustainable energy company in the Permian and DJ basins and looks forward to realizing shareholder value as a cohesive organization.
The combined company’s Board of Directors will consist of 11 members, with six representatives from SM Energy and five from Civitas. Julio Quintana will serve as the non-executive chairman, while Herb Vogel will assume the role of CEO of the combined entity. The company will operate a diversified asset portfolio across the highest-return US shale basins, aiming to generate free cash flow and sustained capital returns.
Evercore and Gibson, Dunn & Crutcher served as advisors to SM Energy, while JP Morgan and Kirkland & Ellis advised Civitas on the merger. Civitas’ interim CEO, Wouter van Kempen, emphasized the merger’s potential to unlock enhanced shareholder value and achieve outcomes beyond what either company could achieve independently. By combining technical teams and assets, the merger will enhance operational excellence, competitiveness, and the responsible production of energy for energy security and prosperity.
The announcement of the merger between SM Energy and Civitas Resources marks a significant milestone in the energy industry, paving the way for increased value creation and operational excellence. This article was originally published by Offshore Technology, a GlobalData-owned brand, providing valuable insights into the latest developments in the offshore energy sector.
