Concho Resources To Buy RSP Permian In $9.5 Bln All-Stock Deal - Quick Facts

(RTTNews) - Concho Resources Inc. (CXO) announced Wednesday that it has entered into a definitive agreement to acquire RSP Permian, Inc. (RSPP) in an all-stock transaction valued at approximately $9.5 billion, inclusive of RSP's net debt.

The consideration will consist of 0.320 shares of Concho common stock for each share of RSP common stock. This represents consideration to each RSP shareholder of $50.24 per share based on the closing price of Concho common stock on March 27, 2018.

The consideration represents an approximately 29% premium to RSP's closing price of $38.92 on March 27. Upon closing of the transaction, Concho shareholders will own approximately 74.5% of the combined company, and RSP shareholders will own approximately 25.5%.

The transaction was unanimously approved by the board of directors of each company. It is expected to be completed in the third quarter of 2018, subject to the approval of both Concho and RSP shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.

Upon closing, Concho's board will be expanded to 11 directors, to include one independent member of the RSP board. Concho will continue to be headquartered in Midland, Texas.

The acquisition is expected to be accretive in the first year to Concho's key per-share metrics, including net asset value, earnings, cash flow and debt-adjusted growth. In addition, the transaction is expected to enhance Concho's three-year outlook for annualized production growth on a capital program within cash flow from operations.

With the deal, Concho expects to realize over $60 million in annual corporate level savings. The present value of corporate and operational synergies is expected to exceed $2 billion.

The acquisition would expand Concho's strategic portfolio in the Permian Basin to approximately 640,000 net acres. The combined company will run the largest drilling program in the Permian Basin with 27 rigs.