SM Energy Company (SM) and Civitas Resources, Inc. (CIVI) have secured shareholder approval for their all‑stock merger, with the transaction expected to close on January 30, 2026.
SM Energy shareholders voted in a special meeting held on January 27, 2026, with 76.5% of outstanding shares represented. Ninety‑nine point one percent of those shares approved the issuance of SM Energy common stock to Civitas shareholders, and 98.6% approved an amendment to the company’s certificate of incorporation to increase authorized shares. Civitas shareholders also voted in a separate meeting on the same day, with 82.9% of shares represented and over 97% voting in favor of the transaction.
The merger will combine SM Energy’s operations in the Midland, Maverick, and Uinta basins with Civitas’s Permian and DJ Basin assets, creating a top‑10 U.S. producer with roughly 526,000 barrels of oil equivalent per day. The all‑stock deal is valued at approximately $12.8 billion and is structured as a 1.45 SM Energy share for every Civitas share, giving SM Energy shareholders 48% ownership of the combined company and Civitas shareholders 52%.
Management highlighted the strategic rationale behind the combination. Herb Vogel, CEO of SM Energy, said the merger “brings together two highly complementary organizations to create a leading oil and gas company with enhanced scale and top‑tier assets.” Wouter van Kempen, interim CEO of Civitas, noted that the deal “strengthens our competitive position in the highest‑return U.S. shale basins” and unlocks new value. Beth McDonald, President and COO of SM Energy, added that the combined entity will “unlock significant free cash flow to strengthen our balance sheet, accelerate capital returns, and position us for sustainable growth through every cycle.”
Analysts have expressed increased confidence in the merger’s prospects. The transaction is expected to generate annual synergies of $200 million to $300 million through operational, G&A, and capital efficiencies, while SM Energy plans to divest at least $1 billion of assets within a year of closing to further strengthen its balance sheet. Credit agencies have upgraded their outlooks, with S&P and Fitch placing the combined company on CreditWatch Positive and Rating Watch Positive, respectively, reflecting the enhanced scale and diversification.
The merger also aligns with a broader trend of consolidation in the U.S. shale industry, driven by investor demand for capital discipline and shareholder returns. While the deal is all‑stock, the combined company will maintain a quarterly cash dividend and is expected to deliver sustainable dividends to shareholders. The transaction is subject to customary closing conditions, and the parties have indicated that the closing is anticipated on January 30, 2026.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.