(Reuters) -Chesapeake Energy said on Thursday it would buy smaller rival Southwestern Energy in an all-stock transaction valued at $7.4 billion, a deal that would enable the second-largest U.S. natural gas producer to take the top spot.
The move extends a recent spate of multi-billion deals in the U.S. energy sector including Exxon Mobil’s $60-billion Pioneer Natural Resources offer and Chevron’s $53-billion agreement for Hess, as firms seek lucrative acreage to rebuild depleting assets.
Chesapeake has offered $6.69 per Southwestern share held, representing a discount of about 3% to the stock’s last close, according to Reuters calculation.
Southwestern shares fell 4.5% in premarket trading.
U.S. natural gas prices are expected to tick higher from a jump in exports, analysts have said after a gloomy 2023 due to record production, ample inventories and a mild winter. Profits also took a hit as prices plunged 40% in 2023 from a year earlier.
The deal is expected to close in the second quarter of 2024.
(Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
Comments