Under the agreement, Clayton Williams Energy (NYSE: CWEI) shareholders will receive 2.7874 shares of Noble Energy (NYSE: NBL) stock and $34.75 in cash per CWEI share. That figure represents a 34% premium to Clayton Williams' closing price on January 13, the last day of trading before the transaction's announcement. The $3.2 billion sticker price includes the assumption of approximately $500 million in net debt. Noble Energy intends to fund the cash portion of the acquisition by drawing on its $4 billion revolving credit facility.
Noble Energy will pick up some 71,000 acres of the Southern Delaware Basin in Texas with the deal, increasing the company's holdings in the region to 120,000 net acres. Ares Management, which owns a 35% stake in Clayton Williams, has supported the deal along with the boards of both companies. CWEI shares closed up 40% on the news, at $145.25 apiece, while NBL shares enjoyed a 7% bump to end the day at $40.05.