Aug 25 (Reuters) - U.S. oil and gas producer Crescent Energy will buy smaller peer Vital Energy in an all-stock transaction valued at $3.1 billion, including debt, Crescent said on Monday.

The deal gives Crescent a significant foothold in the Permian shale basin of Texas and New Mexico. As the most productive U.S. oilfield, it continues to draw investor interest despite a broader slowdown in dealmaking activity in the sector.

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Greater scale should also make the company more attractive to investors, analysts said.

"This sector has been mostly out of favor for many years, and scale gets you relevance with investors," said Tim Rezvan, analyst at KeyBanc Capital Markets. "Now, (Crescent) becomes a much more prominent company."

Reuters first reported on Friday that the companies were in advanced talks.

The transaction calls for Vital shareholders to get 1.9062 shares of Crescent common stock for each of their shares, making the offer worth $18.95 per share, a 20% premium to Vital's closing share price on Friday.

However, Crescent's stock fell more than 4.8% to $9.47 on Monday. At that level, the deal would net Vital shareholders around $18.05 per share, while Vital's shares were last up over 15.5% to $18.24.

The offer hardly feels like a win for Vital, Capital One Securities analysts said in a note, highlighting a nearly 50% slump in the company's stock so far this year.

"There's room for higher valued competitors with nearby assets to outbid Crescent with more obvious synergies and strategic value," said Josh Young, chief investment officer at Bison Interests, which owns shares of Vital. Young did not disclose the size of his ownership.

The deal, expected to close by the end of 2025, will generate $90 million to $100 million in immediate annual cost savings and will boost cash flow, Crescent said.

Crescent, which will assume about $2.3 billion of Vital's debt, has lined up a $1 billion pipeline of non-core asset sales to help improve the balance sheet, it said.

Going forward, Crescent's core focus areas are likely to be the Permian basin, the Eagle Ford basin of south Texas and the Uinta basin of Utah, so assets outside those areas should be considered potential divestments, Enverus analyst Andrew Dittmar said.

Crescent shareholders will own about 77% of the combined company and Vital stockholders will own the rest, Crescent said.

https://www.reuters.com/legal/transactional/crescent-energy-acquire-vital-energy-31-billion-shale-deal-2025-08-25/