Crescent Energy Company (NYSE: CRGY) and Vital Energy, Inc. (NYSE: VTLE) have announced a definitive agreement for Crescent to acquire Vital in an all-stock transaction valued at approximately $3.1 billion, including Vital's net debt. This transaction represents a 5% premium to the 30-day volume weighted average price (VWAP) exchange ratio and a 15% premium to Vital's 30-day VWAP as of August 22, 2025.
Upon the completion of the transaction, Crescent shareholders will own about 77% of the combined company, and Vital shareholders will own approximately 23% on a fully diluted basis. The transaction is expected to close by year-end 2025, subject to customary closing conditions, including approvals by shareholders of both companies and regulatory agencies.
The acquisition is expected to bring about immediate annual synergies of $90 * $100 million, with potential for significant incremental operating efficiencies. Moreover, the combined company is projected to have access to over $60 billion of opportunities surrounding its footprint, establishing it as a top 10 independent with a scaled and focused asset portfolio.
The transaction is said to offer compelling value for all shareholders, with strong cash-on-cash investment returns, high accretion across cash flow from operations (CFFO), free cash flow (FCF), and net asset value (NAV) per share. Crescent's strategy will focus on free cash flow and attractive returns, and it plans to implement a lower activity, higher free cash flow business plan to align assets with its consistent strategy.
Crescent also aims to enhance its balance sheet quality, leveraging an accretive business plan and a pipeline of non-core divestitures totaling approximately $1 billion. This move is expected to create the largest liquids-weighted producer without investment grade status.
Following the completion of the transaction, the Crescent board of directors will increase to 12 members with the addition of two directors designated by Vital. John Goff will continue to serve as non-executive chairman, and David Rockecharlie will continue as chief executive officer of the combined company, which will remain headquartered in Houston.
Crescent's financial advisor for the transaction is Jefferies LLC, with Kirkland & Ellis LLP serving as its legal counsel. Vital is being advised by Houlihan Lokey and J.P. Morgan Securities LLC, with Vinson & Elkins LLP serving as its legal counsel.
The companies plan to host a joint conference call and webcast on August 25, 2025, to provide further details about the transaction.
In connection with the transaction, Crescent will file with the U.S. Securities and Exchange Commission a registration statement on Form S-4, which will include a joint proxy statement of Crescent and Vital and a prospectus of Crescent. Investors and security holders are urged to read the registration statement and the joint proxy statement/prospectus carefully and in their entirety because they will contain important information about the transaction and related matters.
This acquisition marks a significant move for both Crescent and Vital, establishing the combined entity as a top player in the industry and setting the stage for sustained long-term growth and value creation. The market has reacted to these announcements by moving the company's shares 15.77% to a price of $18.28. Check out the company's full 8-K submission here.
