SM Energy (Louisiana roots) to acquire Civitas for $2.8 Billion

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Oil-and-gas producer SM Energy announced a roughly $2.8 billion agreement to acquire rival Civitas.

SM said on Monday that it was merging with Civitas in an all-stock transaction that seeks to give the companies scale and help them pay down their debt faster.

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Oil and gas producers SM Energy and Civitas Resources will combine in a $12.8 billion merger of near equals that will expand SM as a major producer in the booming Permian Basin.

The two Denver-based energy players said Nov. 3 they are combining forces as the oil and gas industry continues to consolidate, and the most prized assets are the needed inventory and scale to continue drilling wells for decades to come. The merger is the biggest U.S. oil and gas acquisition since crude oil prices plunged in the beginning of April following the onset of tariffs and increased production from OPEC.

The deal also will create one of the biggest oil and gas companies led by a woman, because the combined entity will be led by SM President and COO Beth McDonald, with SM CEO Herb Vogel set to retire in March.

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SM energy focuses primarily in West Texas’s Permian Basin, South Texas’s Eagle Ford Shale, and Utah’s emerging Uinta Basin. Civitas is concentrated in the Permian and Colorado’s DJ Basin.

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While SM is acquiring Civitas, Civitas shareholders actually will own 52% of the combined company after the all-stock deal. At the close of business on Oct. 31, SM held a $2.4 billion market cap compared to Civitas’s $2.67 value. The deal holds a $12.8 billion enterprise value, including debt.

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SM, founded more than 115 years ago as the St. Mary Parish Land Co. in southern Louisiana, also is the only oil company named after the mother of Jesus.

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