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In a landmark move within the US oil industry, Diamondback Energy, advised by Wachtell Lipton, has initiated a $26 billion acquisition of Endeavor Energy Partners, represented by Paul Weiss and Vinson & Elkins. This cash-and-stock deal not only positions Diamondback as the third-largest player in the prolific Permian Basin but also demonstrates its strategic prowess in outmaneuvering larger competitors such as ConocoPhilips.
Strategic Implications and Key Players
The acquisition propels Diamondback Energy, valued at $27 billion, into a formidable position in the Permian Basin, trailing only Exxon Mobil and Chevron. Led by corporate partners Zachary Podolsky and Steven Green, Wachtell Lipton’s team spearheads Diamondback’s strategic expansion, supported by a lineup of legal experts across various domains including antitrust, executive compensation, and taxation.
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On the opposing side, Endeavor Energy Partners is guided by the seasoned team at Paul Weiss, with corporate partners Krishna Veeraraghavan and Benjamin Goodchild at the helm, supported by a cadre of legal talent spanning corporate, tax, litigation, and IP domains. Vinson & Elkins, represented by partners Doug McWilliams, Bryan Loocke, and Jackson O’Maley, further fortifies Endeavor’s legal stance in this monumental deal.
Industry Consolidation and Legal Landscape
The acquisition marks another milestone in the ongoing consolidation within the US oil and gas sector, offering substantial legal work amidst a challenging global M&A landscape. Previous notable mergers, including ExxonMobil’s acquisition of Pioneer Natural Resources and Chevron’s purchase of Hess, have underscored the sector’s trend towards consolidation, providing a fertile ground for legal expertise.
Financial and Advisory Structure
Diamondback’s acquisition of Endeavor, structured with approximately 117.3 million shares of Diamondback common stock and $8 billion in cash, is expected to close in the fourth quarter. Jefferies and Citi provide financial advisory services to Diamondback, while JP Morgan Securities and Goldman Sachs offer their expertise to Endeavor, highlighting the involvement of top-tier financial institutions in facilitating this historic transaction.
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Legal Teams and Expertise
In addition to the lead partners, both legal teams boast a constellation of legal talent spanning various specialties. Paul Weiss supplements its core team with experts in tax, executive compensation, litigation, and IP, ensuring comprehensive legal coverage throughout the acquisition process. Vinson & Elkins brings in a multifaceted team, encompassing corporate, energy transactions, executive compensation, environmental, employment, and regulatory law, to bolster Endeavor’s legal position.
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