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Latham Advises Chesapeake Energy in Combination With Southwestern Energy to Accelerate America’s Energy Reach

January 11, 2024
Firm advises one of the largest independent energy companies in transaction with an enterprise value of approximately US$24 billion.

Chesapeake Energy Corporation (NASDAQ:CHK) and Southwestern Energy Company (NYSE:SWN) announced that they have entered into an agreement to merge in an all-stock transaction. Under the terms of the agreement, Southwestern shareholders will receive a fixed exchange ratio of 0.0867 shares of Chesapeake common stock for each share of Southwestern common stock owned at closing. At this exchange ratio and the respective share prices on January 10, 2024, the combined company would have an enterprise value of approximately US$24 billion. Pro forma for the transaction, Chesapeake shareholders will own approximately 60% and Southwestern shareholders will own approximately 40% of the combined company.

The strategic combination will create a premier energy company underpinned by a leading natural gas portfolio adjacent to the highest demand markets, premium inventory, resilient free cash flow, and an Investment Grade quality balance sheet. The combined company, which will assume a new name at closing, will be uniquely positioned to deliver affordable, lower carbon energy to meet growing domestic and international demand with significant, sustainable cash returns to shareholders through cycles.

Latham & Watkins LLP represents Chesapeake Energy in the transaction with a corporate deal team led by Houston partners Kevin Richardson, Bill Finnegan, and Ryan Lynch, with associates Denny Lee, Zainab Hashmi, Robert Cunningham, Tasbiha Batool, Rafael Go, Siyao Liu, and Dan Harrist. Advice was also provided on tax matters by Houston partners Tim Fenn and Jim Cole, with associate Christine Mainguy; on finance matters by Houston partners Craig Kornreich and Pamela Kellet, New York partner Yvette Valdez, and Houston counsel Natalie McFarland, with associates Michael Basist, Tiiu Lemsalu, Naffie Lamin, and Chris Fanick; on benefits matters by Washington, D.C. partner Adam Kestenbaum, with associate Joe Denker; on environmental matters by Los Angeles/Houston partner Joshua Marnitz, with associate Nolan Fargo; on oil and gas matters by Houston partner Michael King, with associate Cesar Leyva; on capital markets matters by Austin partner Samuel Rettew, with associates Om Pandya and Manu Vadlamudi; on antitrust matters by Washington, D.C. partner Jason Cruise, with associates Caitlin Fitzpatrick and Mary Casale; and on data privacy matters by Houston counsel Robert Brown.

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