Chesapeake Energy Corporation entered into an agreement to acquire Southwestern Energy Company for $7.4 billion.
The transaction is subject to customary closing conditions, including approvals by Chesapeake and Southwestern shareholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, Chesapeake?s registration statement on Form S-4 having been declared effective by the U.S. Securities and Exchange Commission, the shares of Chesapeake Common Stock issuable to holders of shares of Southwestern Common Stock pursuant to the Merger Agreement having been authorized for listing on the Nasdaq Global Select Market, the merger must qualify as a ?reorganization? within the meaning of Section 368(a) of the Code, and regulatory clearances. The agreement has been unanimously approved by the boards of directors of both companies. The transaction is targeted to close in the second quarter of 2024. On April 4, Chesapeake and Southwestern each received a request for additional information and documentary materials (the ?Second Request?) from the FTC in connection with the FTC?s review of the Merger. Issuance of the Second Request extends the waiting period imposed by the HSR Act until 30 days after Chesapeake and Southwestern have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC. Chesapeake and Southwestern will continue to work cooperatively with the FTC in its review of the Merger, and now expect that the Merger will be completed in the second half of 2024, subject to the fulfillment of the other closing conditions, including approvals of Chesapeake and Southwestern shareholders.
Evercore acted as lead financial advisor and fairness opinion provider, J.P. Morgan Securities LLC as financial advisor, Kevin M. Richardson, William N. Finnegan IV and Ryan J. Lynch of Latham & Watkins LLP and David A. Katz of Wachtell, Lipton, Rosen & Katz as legal advisors, and DrivePath Advisors as communications advisor to Chesapeake. Chesapeake has agreed to pay Evercore a fee for its services in an aggregate amount of up to $20 million, of which $2.5 million was payable upon delivery of Evercore?s opinion. Morgan Stanley also advised Chesapeake. Goldman Sachs & Co. LLC. acted as lead financial advisor and fairness opinion provider and RBC Capital Markets, LLC along with BofA Securities and Wells Fargo Securities, LLC as financial advisors to Southwestern Energy. Southwestern has agreed to pay Goldman Sachs a transaction fee of approximately $40 million. Douglas E. Bacon, Kim Hicks and Patrick Salvo of Kirkland & Ellis LLP acted as legal advisor, and Joele Frank as communications advisor to Southwestern Energy. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Goldman Sachs & Co. LLC. Chesapeake has retained Alliance Advisors as proxy solicitor. Chesapeake agreed to pay Alliance Advisors a fee of $35,000. Southwestern has retained Morrow Sodali as proxy solicitor for a fee of $50,000. Equiniti Trust Company is the transfer agent for shares of Chesapeake. Computershare, N.A. is acting as Southwestern?s transfer agent. Evercore, Latham and Wachtell acted as due diligence providers to Chesapeake. Goldman, RBCCM and Kirkland acted as due diligence providers to Southwestern.