DNOW Inc. (NYSE: DNOW) and MRC Global Inc. (NYSE: MRC) have announced a definitive merger agreement in an all-stock transaction valued at approximately $1.5 billion, inclusive of MRC Global’s net debt. The transaction is expected to close in the fourth quarter of 2025, subject to obtaining DNOW and MRC Global shareholder approval and regulatory clearances, and satisfaction of other customary closing conditions.
Upon completion of the transaction, DNOW and MRC Global shareholders will respectively own approximately 56.5% and approximately 43.5% of the combined company on a fully diluted basis. The combined company is expected to maintain a strong balance sheet with a streamlined capital structure, with post-closing net leverage expected to be under 0.5x.
The combined company is anticipated to generate $70 million of annual cost synergies within three years following closing through public company costs, corporate and IT systems, and operational and supply chain efficiencies. The merger is also expected to accelerate growth and deliver double-digit adjusted earnings per share (EPS) accretion in the first year following closing.
DNOW and MRC Global have highlighted the following compelling benefits of the transaction: Combines highly complementary businesses, offering distinctive and complementary products and services to the energy and industrial sectors across upstream, midstream, downstream, gas utility, and industrial customers. Expands scale and scope, with an expanded geographic footprint and distribution presence in the U.S., Canada, and attractive international markets, with approximately 5,000 team members. Unlocks meaningful synergies, with the combined company expected to generate $70 million of annual cost synergies within three years following closing. Strong cash flow generation, enabling the combined company to continue the execution of its capital allocation strategy and pursue further growth, with the expectation of achieving rapid deleveraging and having a net cash position by the end of the first year post-closing.
DNOW President and CEO David Cherechinsky stated, "The combination of DNOW and MRC Global will create a premier energy and industrial solutions provider with a balanced portfolio of businesses and a diversified customer base fortifying long-term profitability and cash flow generation." Rob Saltiel, MRC Global’s President and CEO, added, "Bringing our two companies together advances our shared goal of becoming a premier choice for energy, gas utility and industrial customers seeking exceptional service and solutions for the largest and most complex industry needs."
Upon completion of the transaction, David Cherechinsky, President and CEO of DNOW, will serve as President and CEO of the combined company, and Mark Johnson, CFO of DNOW, will serve as CFO of the combined company. The combined company will be named DNOW and trade on the NYSE under the DNOW ticker. The DNOW and MRC Global brands will continue following closing of the transaction, and the combined company will remain headquartered in Houston, Texas.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to DNOW and has provided committed financing, with Kirkland Ellis serving as legal advisor. J.P. Morgan Securities LLC is serving as exclusive financial advisor to MRC Global, and Akin Gump Strauss Hauer & Feld LLP is serving as legal advisor. As a result of these announcements, the company's shares have moved 3.15% on the market, and are now trading at a price of $15.06. For the full picture, make sure to review DNOW's 8-K report.
