Mergers & Acquisitions
FBFK’s weekly look at notable developments in corporate governance, securities, capital markets and M&A, with an emphasis on Texas and California.
Dealmaking dominated the week. Texas energy and technology companies announced roughly $15 billion in transactions, a California drugmaker agreed to a $1.65 billion cash sale, and Paramount closed its Warner Bros. Discovery acquisition after a California-led settlement set the conditions. In the capital markets, Texas Capital moved its primary listing from Nasdaq to the Texas Stock Exchange.
Paramount Closes $110 Billion Warner Bros. Discovery Acquisition Under California-Led Settlement
Paramount completed its roughly $110 billion acquisition of Warner Bros. Discovery on Oct. 6, paying WBD shareholders about $31.02 per share in cash; the combined company now trades as Skydance. The closing came one day after Justice Elena Kagan denied five consumers’ emergency application to keep the companies separate pending their antitrust challenge. It also follows a settlement with a 12-state coalition led by California Attorney General Rob Bonta, approved by a federal judge in California, under which Paramount committed to at least $300 million more in annual domestic production, a news editorial independence board and a five-year independent monitor. Takeaway: in large strategic deals, state attorneys general can extract post-closing operating commitments that bind the combined company for years.
Sources: Courthouse News Service, “Consumers File Hail Mary at SCOTUS to Block Paramount-Warner Merger”; Cord Cutters News, “It’s Done! Paramount Completes Warner Bros. Discovery Acquisition, Launches Combined Company as Skydance”
Related: Corporate, Securities & M&A
Texas Capital Moves Its Primary Listing From Nasdaq to the Texas Stock Exchange
Texas Capital Bancshares, the Dallas-based parent of Texas Capital Bank, began trading its common and preferred stock on the Texas Stock Exchange at the Oct. 8 market open, moving its primary listings from Nasdaq. The company announced the switch in September, and its ticker is expected to change from TCBI to TXCP on Nov. 9; stockholders need not take any action. The move came three days after Energy Transfer and three affiliated entities moved their primary listings to TXSE, which the exchange described as its first corporate primary listings. Takeaway: TXSE is now an operating listing venue, and boards of Texas-based issuers should be ready to weigh listing costs, liquidity and investor reaction if a venue change comes up.
Sources: GlobeNewswire, “Texas Capital Bancshares, Inc. Now Trading on the Texas Stock Exchange”; Texas Stock Exchange, “Texas Stock Exchange Celebrates Move of Energy Transfer Partnership’s Primary Listings”
Related: Corporate, Securities & M&A
Viatris to Acquire California-Based Pacira BioSciences for $1.65 Billion in Cash
Viatris agreed on Oct. 8 to acquire Pacira BioSciences, based in Brisbane, California, for $36.50 per share in cash, an aggregate equity value of about $1.65 billion and, per Reuters, a 44.8% premium to Pacira’s last close. The deal is structured as a cash tender offer followed by a second-step merger at the same price. Closing requires the tender of a majority of Pacira’s outstanding shares and expiration of the applicable regulatory waiting period, and is expected by the end of 2026. Viatris will fund the purchase mainly with excess cash and short-term borrowings, adding Pacira’s non-opioid pain drugs Exparel and Zilretta. Takeaway: two-step tender offers remain an efficient way to shorten the timeline in all-cash public company acquisitions.
Sources: KSL.com (Reuters), “Viatris Bets on Non-Opioid Pain Drugs With $1.65 Billion Pacira Deal”; Fierce Pharma, “Viatris to Snap Up Pacira’s Non-Opioid Pain Pipeline for $1.65B”; Pacira BioSciences (SEC filing), “Viatris Agrees to Acquire Pacira BioSciences, Advancing Its Innovative Medicines”
Related: Corporate, Securities & M&A
Crescent Energy to Buy Devon Energy’s Eagle Ford Assets for $4.2 Billion
Houston-based Crescent Energy agreed to acquire Devon Energy’s Eagle Ford position for about $4.2 billion in cash, in a deal reported Oct. 8. The package covers roughly 90,000 net acres in Karnes, DeWitt and Gonzales counties, more than 600 net drilling locations and about 68,000 barrels of oil equivalent per day of production. Crescent expects about $140 million in annual synergies and says the deal makes it the Eagle Ford’s second-largest producer. Devon plans to use after-tax proceeds for buybacks and debt reduction as it concentrates on the Permian Basin. Closing is targeted near year-end 2026. Latham & Watkins and Vinson & Elkins advised Crescent; Kirkland & Ellis advised Devon. Takeaway: portfolio pruning by large producers keeps creating scale opportunities for consolidators.
Sources: The Texas Lawbook, “Devon Energy Exits Eagle Ford in $4.2B Asset Sale to Crescent” (Subscription required); Oil & Gas Journal, “Crescent Energy to Acquire Eagle Ford Assets From Devon for $4.2 Billion”
Related: Corporate, Securities & M&A
Energy Transfer to Acquire Vaquero Midstream in $2.6 Billion Cash-and-Units Deal
Dallas-based Energy Transfer agreed to acquire Dallas-based Vaquero Midstream for about $2.625 billion, paid as $1.95 billion in cash plus roughly 33.3 million newly issued Energy Transfer common units. Vaquero runs about 300 miles of pipeline in the Delaware Basin of West Texas and the Caymus processing complex, which has about 675 MMcf/d of capacity and room for two more trains that could raise capacity to about 1.2 Bcf/d. Energy Transfer expects the deal to be immediately accretive and to close in the fourth quarter, subject to regulatory approval. Sidley Austin advised Energy Transfer; Willkie Farr & Gallagher advised Vaquero. Takeaway: mixed cash-and-equity consideration remains a practical tool for bolt-on midstream acquisitions.
Sources: The Texas Lawbook, “Energy Transfer Buys Vaquero Midstream for $2.6B” (Subscription required); World Pipelines, “Energy Transfer to Acquire Vaquero Midstream”
Related: Corporate, Securities & M&A
SpaceX Agrees to Buy Grain Management’s 800 MHz Spectrum, Reportedly for $8 Billion
Texas-headquartered SpaceX announced on the evening of October 8 that it had entered into an agreement to acquire Washington, D.C.-based Grain Management’s portfolio of 800 MHz low-band spectrum licenses. The companies did not disclose a price, but The Wall Street Journal and Bloomberg reported about $8 billion. FCC approval is required, and SpaceX has filed a public interest statement with the agency. SpaceX says the airwaves would pair its next-generation satellites with a terrestrial network to improve indoor coverage for its mobile service. AT&T, Verizon and T-Mobile shares fell after the announcement. Gibson Dunn, Milbank and Latham & Watkins advised on the transaction. Takeaway: for spectrum deals of this size, FCC review will drive timing and any conditions.
Sources: The Texas Lawbook, “SpaceX Enters D2D Services with $8B Spectrum License Buy” (Subscription required); Broadband Breakfast, “SpaceX Acquiring Grain Spectrum to Support Mobile Ambitions”
Related: Corporate, Securities & M&A
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