Hitch in the Haymaker: FTC Request Delays Chesapeake-Southwestern Merger

Zinger Key Points
  • Chesapeake Energy's merger with Southwestern Energy delayed due to FTC's request for additional information.
  • Anticipated completion now expected in the second half of 2024, extending waiting period under the HSR Act.

Chesapeake Energy Corporation CHK disclosed that its merger with Southwestern Energy Company SWN is expected be delayed as the FTC requested additional information and documentary materials from both companies.

Consequently, Chesapeake and Southwestern now expects the merger to be completed in the second half of 2024. Earlier, the companies expected the deal to close in the second quarter of 2024.

Also ReadDrilling Deep: Analyst Outlines Chesapeake Merger Synergies, Delays Due To Regulatory Risks

The issuance of the second request extends the waiting period imposed by the HSR Act until 30 days after the companies have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC. 

In January 2024, both companies inked a merger deal through an all-stock transaction valued at $7.4 billion, or $6.69 per share, based on Chesapeake’s closing price on January 10, 2024.

At this exchange ratio and the respective share prices on January 10, 2024, the combined company would have an enterprise value of around $24 billion

RelatedChesapeake Energy’s Strategic Merger with Southwestern Energy Wins Analyst Endorsement: Upgraded Ratings and Anticipated Market Dominance

Investors can gain exposure to the stock via Invesco Energy Exploration & Production ETF PXE and Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT

Price Action: CHK shares are down 0.10% at $89.23 on the last check Friday.

Photo via Shutterstock

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