Coterra to Merge with Devon in $58 Billion All-Stock Deal; Price Target Raised to $35
Coterra agreed to merge with Devon Energy in an all-stock deal valuing the combined entity at $58 billion, with Coterra shareholders receiving 0.70 Devon shares each, owning 46% post-close. Wolfe Research raised Coterra’s rating to Outperform and boosted its price target to $35.
1. All-Stock Merger Terms
Coterra will combine with Devon Energy in an all-stock transaction that values the merged company’s enterprise at $58 billion. Each Coterra share will convert into 0.70 shares of Devon common stock, preserving balance-sheet strength by avoiding new debt.
2. Post-Merger Ownership Split
Upon closing, Devon shareholders will own 54% of the combined entity while Coterra shareholders will hold the remaining 46%, aligning shareholder interests across expanded operations.
3. Strategic Synergies, Scale and Dividend Outlook
The merger targets $1 billion in annual pretax synergies by the end of 2027 through cost savings and operational integration across the Permian, Marcellus and Anadarko basins. The combined company plans a quarterly dividend of $0.315 per share, a 31% increase over Devon’s current payout.
4. Analyst Rating and Price Target
Wolfe Research upgraded Coterra to an Outperform rating and increased its price target to $35, citing enhanced scale, diversified asset base and stronger cash flow visibility from the merger.