Diamondback Energy, Inc. (NasdaqGS:FANG) entered into a definitive agreement to acquire Energen Corporation (NYSE:EGN) from group of shareholders for approximately $8.4 billion on August 14, 2018. Under the terms of the transaction, Energen Corporation will receive for each Energen shares held, 0.6442 common shares of Diamondback Energy. Diamondback Energy will also assume net debt of approximately $830 million. Each Accelerating Energen performance share award shall fully vest and shall be cancelled and converted automatically into the right to receive 0.6442 common shares of Diamondback in respect of each share of Energen Common Stock underlying such Award, each Energen restricted stock unit award shall be converted into an award of Diamondback restricted stock units award and each Energen Performance Share Award, other than an Accelerating Performance Share Award, shall be converted into a Diamondback restricted stock units award in respect of that number of whole shares of Diamondback common stock equal to the product of the total number of shares of Energen common stock subject to such Energen award multiplied by the Exchange Ratio.

Each option and stock appreciation right in respect of shares of Energen Common Stock shall be converted into a fully vested option and stock appreciation right, respectively in respect of that number of whole shares of Diamondback common stock equal to the product of the total number of shares of Energen Common Stock subject to such option/SAR multiplied by the Exchange Ratio, at an exercise price per share of Diamondback common stock equal to the quotient of the exercise price per share of Energen Common Stock of such Option/ SAR divided by the Exchange Ratio.

Upon closing the transaction, Diamondback shareholders will own approximately 62% of the combined company, and Energen shareholders will own approximately 38%. Post-acquisition, Energen will operate as a wholly owned subsidiary of Diamondback. In case of termination, Diamondback will pay a fee of $400 million whereas Energen will pay a fee of $250 million. Pursuant to closing, shares of Energen common stock will no longer be publicly traded and will be delisted from the NYSE.

Upon closing, Diamondback's Board of Directors and executive team will remain unchanged and Diamondback will continue to be headquartered in Midland, Texas. As a result of transaction, the then existing Directors of the company Jonathan Z. Cohen, Kenneth W. Dewey, M. James Gorrie, Jay Grinney, William G. Hargett, Frances Powell Hawes, Vincent J. Intrieri, Alan A. Kleier, Lori A. Lancaster and James T. McManus, II, resigned from the Board of Directors and from all the committees on which they served at the time of transaction. Travis D. Stice,, Chief Executive Officer and member of board of Diamondback became the sole Director of the company. The transaction is subject to the approval of both Diamondback and Energen shareholders, the satisfaction of certain regulatory and anti-trust approvals including any applicable waiting period (or any extensions of such waiting period) has expired or been terminated, effectiveness of registration statement, qualification of the merger under specific tax code, listing of shares issued in the transaction and other customary closing conditions. The transaction has been unanimously approved by the Board of Directors of Diamondback and Energen. On September 10, 2018, the transaction was approved by the Federal Trade Commission. The registration statement on Form S-4 relating to the merger was declared effective by the SEC on October 24, 2018.

Diamondback and Energen will each hold a special meeting of their respective stockholders and shareholders to consider certain matters relating to the merger on November 27, 2018. Diamondback and Energen cannot complete the merger unless, among other things, Diamondback stockholders approve the issuance of shares of Diamondback common stock in connection with the merger and Energen shareholders approve the merger agreement. As on November 14, 2018, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC has recommended that Diamondback's stockholders vote in favor of the transaction. The deal is expected to be completed by the end of the fourth quarter of 2018. As of November 7, 2018, the deal is expected to complete by the end of November 2018. As on November 27, 2018 the transaction was approved by the shareholders of both Diamondback and Energen. As on November 27, 2018, the transaction is expected to be completed on November 29, 2018 subject to satisfaction of the remaining customary closing conditions. The deal is immediately accretive in 2019 on key per-share metrics including: earnings per share, cash flow per share, net asset value, production growth per debt-adjusted share and acreage.

Citigroup Global Markets Inc. acted as financial advisor for Diamondback Energy. Seth Molay, Jeffrey Kochian, Matt Zmigrosky, Brittany Harrison, Christopher Kunz, Vicken Antounian, Victoria Chu, Robin Schachter, Ron Nardini, David Quigley, Andrew Oelz, Alan Laves, Kathryn Betts, Michael Byrd, Stephen Boone, Shane Sullivan, Lauren Leyden and Dustin Stark of Akin Gump Strauss Hauer & Feld LLP acted as legal advisors for Diamondback Energy. J.P. Morgan Securities LLC and Tudor Pickering Holt & Co Advisors LP acted as financial advisors to Energen Corporation. Andrew R. Brownstein, Mark Gordon, Zacary S.Podolsky, Meng Lu, Nelson O. Fitts, Christina C. Ma, Jeannemarie Oa Brien, Michael J.Schobel, Joshua A. Feltman, John R. Sobolewski, Jodi J.Schwartz and Rachel B.Reisberg of Wachtell, Lipton, Rosen & Katz LLP acted as legal advisors to Energen Corporation. MacKenzie Partners, Inc. acted as proxy solicitor for Diamondback and Diamondback will pay MacKenzie Partners a fee of approximately $0.03 million as well as reasonable and documented out-of-pocket expenses. Innisfree M&A Incorporated acted as proxy solicitor for Energen and Energen will pay Innisfree a fee expected not to exceed $0.03 million, as well as reasonable expenses. Computershare Trust Company, N.A. acted as transfer agent for Energen and Diamondback.

Tudor Pickering Holt will receive a fee of 0.25% of the aggregate consideration upon the consummation of the merger, which is currently expected to be $21.4 million. Energen has agreed to pay J.P. Morgan a fee of 0.25% of the aggregate consideration, which is currently expected to be approximately $21.4 million, $3 million of which was payable upon delivery by J.P. Morgan of its opinion and the remainder of which will become payable only if the merger is consummated. Breen Haire, Chris May, Kyle Kreshover and Ana Sanchez of Simpson Thacher & Bartlett LLP acted as legal advisors to J.P. Morgan and Tudor Pickering Holt & Co. Diamondback has agreed to pay Citi for its services in connection with the proposed merger an aggregate fee of $18 million, of which a portion was payable upon delivery of Citi's opinion and $16 million is payable contingent upon consummation of the merger.