Range Resources (RRC) and Memorial Resource (MRD) announced a definitive merger agreement under which Range will acquire all of the outstanding shares of common stock of MRD in an all-stock transaction valued at $4.4B. This valuation includes the assumption of MRD’s net debt, which was $1.1B as of March 31, 2016. Under the definitive agreement, MRD shareholders will receive 0.375 shares of Range common stock for each share of MRD common stock held. Based on the Range closing price on May 13, 2016, the transaction has an implied value to MRD shareholders of $15.75 per share, representing a 17% premium to the closing price of MRD stock.

Following the transaction, shareholders of MRD are expected to own approximately 31% of the outstanding shares of Range. MRD will have the right to nominate an independent director from MRD to a seat on Range’s Board. The boards of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction.

Completion of the transaction is subject to the approval of the respective companies’ shareholders, certain regulatory approvals and customary closing conditions. The transaction is expected to close in the second half of 2016.