SM Energy Company (NYSE: SM) on Monday announced that it will acquire rival Civitas Resources Inc (NYSE: CIVI) in an all-stock transaction valued at about $2.8 billion.
Under the terms of the agreement, Civitas shareholders will receive 1.45 shares of SM Energy for each Civitas share held.
The combined company is expected to have an enterprise value of around $12.8 billion, inclusive of each company's net debt.
Civitas produces oil across about 140,000 net acres throughout the shale-oil producing Permian Basin of West Texas and New Mexico, while SM Energy has about 109,000 acres in Permian’s Midland Basin.
SM Energy said it expects pro forma second quarter 2025 production of 526 million barrels of oil equivalent per day, along with pro forma full-year 2025 consensus free cash flow of more than $1.4 billion.
The transaction is expected to close in the first quarter of 2026.
Civitas Resources shares were little changed at $28.84 in late-morning trading on Monday, while shares of SM Energy fell 6% to $19.63.