Concho Resources Inc. (NYSE: CXO) announced that it has completed its acquisition of RSP Permian, Inc. (NYSE: RSPP), which now makes Concho the largest unconventional shale producer in the Permian Basin.

Under the terms of the merger, each share of RSP common stock was converted into the right to receive 0.320 shares of Concho common stock. As a result, Concho expects to issue approximately 51 million shares of common stock in connection with the merger. Upon closing of the transaction, Concho shareholders will own approximately 74.5% of the combined company, and RSP shareholders will own approximately 25.5%.

Concho Resources Becomes Biggest Fish in the Permian Sea

Concho Resources Assets; Source Concho Resources

Concho will remain headquartered in Midland, Texas and the board will be expanded to 11 directors including one independent member of the RSP board, former CEO of RSP Steve Gray.

Concho financed this by closing its previously announced offering of $1.6 billion aggregate principal amount of senior unsecured notes, consisting of $1 billion aggregate principal amount of 4.300% senior unsecured notes due 2028 and $600 million aggregate principal amount of 4.850% senior unsecured notes due 2048.

The proceeds from the offering were used to redeem RSP’s 6.625% senior notes due 2022 and 5.250% senior notes due 2025 for approximately $1.2 billion as well as repay a portion of the outstanding balance under RSP’s existing credit facility.

Concho repaid the remaining balance under RSP’s credit facility with borrowings under Concho’s credit facility.

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