Wachtell, Paul Weiss and Vinson & Elkins shepherd Diamondback’s $26bn Endeavor acquisition

Wachtell acts for Diamondback on acquisition that will make it third-biggest producer in largest US oilfield

Wachtell Lipton is acting for US oil producer Diamondback Energy on its $26bn acquisition of privately held rival Endeavor Energy Partners, which is being repped by Paul Weiss and Vinson & Elkins.  

The cash-and-stock deal will turn Diamondback into the third biggest player in the Permian Basin of Texas and New Mexico behind Exxon Mobil and Chevron, both of which announced mega mergers of their own last October.

It also sees Diamondback, which is valued at just $27bn, beat the much larger ConocoPhilips to buy Endeavor. 

The Wachtell team acting for Diamondback is led by corporate partners Zachary Podolsky and Steven Green. It includes partners Nelson Fitts (antitrust); Michael Schobel (executive compensation and benefits); Ian Boczko (insurance); Ryan McLeod (litigation); Emily Johnson (restructuring and finance); and Joshua Holmes (tax).  

Meantime the Paul Weiss team advising Endeavor is led by corporate partners Krishna Veeraraghavan and Benjamin Goodchild and associate Alexia Yang. It also included corporate partners Kyle Seifried, Caith Kushner, Christodoulos Kaoutzanis, Manuel Frey, Aaron Schlaphoff and John Kennedy, and counsel Todd Hahn and Patricia Vaz de Almeida.

Vinson & Elkins’ team is led by partners Doug McWilliams (M&A), Bryan Loocke (energy transactions) and Jackson O’Maley (M&A), with assistance from senior associate Michael Zarcaro and associates Matt Fiorillo, Josh Rutenberg and Ronnie Braxton.  

The deal continues the consolidation of the US oil and gas sector that has provided a rich seam of work for law firms at a time of depressed global M&A markets. 

Last October, ExxonMobil announced its $60bn acquisition of Pioneer Natural Resources, in a deal that will turn it into the biggest producer in the Permian and saw Davis Polk and Gibson Dunn called in to advise the respective parties. The same month Chevron, repped by Paul Weiss, announced its $53bn acquisition of smaller rival Hess, which turned to a Wachtell team also led by Podolsky.  

Those deals proved to be the largest of any industry in 2023, when global M&A activity fell to a 10-year low of $2.9trn amid interest rate increases, persistently high inflation and the threat of recession.   

Wachtell placed fifth in LSEG’s global M&A legal advisor rankings by deal value last year, working on 84 deals worth just over $310bn. Meantime Paul Weiss jumped 10 places to eighth, working on 137 deals worth $243.6bn, and Vinson & Elkins leapt from 41st to 25th place having worked on 99 deals worth $81.4bn.  

Diamondback’s deal to buy Endeavor consists of around 117.3 million shares of Diamondback common stock and $8bn of cash, to be funded through a combination of cash on hand, borrowings under the company’s credit facility and proceeds from term loans and senior notes offerings.  

Diamondback expects the deal to close in the fourth quarter and its stockholders are expected to own 60.5% of the combined company, with Endeavor’s equity holders to own the rest. 

Jefferies is serving as lead financial advisor to Diamondback and Citi is serving as M&A and capital markets advisor. Meantime JP Morgan Securities is acting as exclusive financial advisor to Endeavor and Goldman Sachs provided corporate advisory services. 

Other members of the Paul Weiss team advising on the deal include tax partners Brian Krause, Anne McGinnis and Jeffrey Samuels; executive compensation partners Andrea Wahlquist Brown and Jean McLoughlin; personal representation partner Alan Halperin and counsel Zoey Orol; litigation partners Scott Sher, Joshua Soven, Andre Bouchard and Geoffrey Chepiga; and IP and technology transactions partner Jonathan Ashtor.

Vinson’s team also included senior associates Alex Lewis and Jordan Fossee (corporate); counsel Megan Menniti and associates Sebastian Devora and Vestita Zumot (energy transactions/projects); partners David D’Alessandro and Patricia Adams, counsel Regina Ibarra, senior associate Mary Daniel Morgan and associate Cassandra Zarate (executive compensation/benefits); counsel Alex Bluebond and associate Ashley Plunk (employment/labour); partner Matt Dobbins and associate Kelly Rondinelli (environmental); and partner Damien Lyster and associate Reagan Lutter (energy regulatory). 

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