Chesapeake Energy and Southwestern Energy shareholders approve merger


Shareholders of both Chesapeake Energy of Oklahoma City and Southwestern Energy of Houston, Texas voted overwhelmingly Tuesday to approve the proposed more than $7 billion merger of the two companies.

The merger was announced in January and went to a vote of shareholders of each company. The Federal Trade Commission still must sign off on the agreement.

Chesapeake voters agreed with the plan, as indicated in a filing made late Tuesday with the Securities and Exchange Commission.

Votes For Votes Against Abstentions Broker Non-Votes
115,678,563 201,938 27,371 -0-

Southwestern Energy shareholders approved the merger by a nearly 44 to one margin. A filing by Southwestern Energy with the Securities Exchange Commission explained a total of 907,210,188 shares of common stock were represented in person or by proxy at the special meeting.

For Against Abstain
886,662,607 20,155,571 392,010

“The consummation of the transactions contemplated by the proposed Merger with Southwestern, including the Stock Issuance Proposal, remains subject to regulatory clearance and the satisfaction of other customary closing conditions set forth in the Merger Agreement, as disclosed in the definitive proxy statement,” stated Chesapeake in its filing.

Shareholders of each firm also approved a second proposal and that was the compensation for named executive officers.

Chesapeake shareholders voted as shown below:

Votes For Votes Against Abstentions Broker Non-Votes
73,097,257 42,625,916 184,699 -0-

Southwestern Energy shareholders also approved the compensation for named executive officers.

For Against Abstain
866,508,238 39,141,453 1,560,497

The Southwestern Energy SEC filing indicated that approval of the compensation proposal was not a condition for the completion of the merger with Chesapeake Energy.

It was mid-January when the $7.4 billion merger was announced by the two companies, Chesapeake Energy in Oklahoma City and Southwestern Energy in Houston, Texas. It was announced as a merger involving an all-stock transition with a value of $6.69 per share based on Chesapeake’s closing price on Jan. 10.

Under the deal, Southwestern shareholders are to receive 0.0867 shares of Chesapeake common stock for each share of Southwestern common stock outstanding at the closing. It had a reported value of $7.4 billion but the reported enterprise value of the two companies was closer to $24 billion.

The merger has yet to win approval from the Federal Trade Commission. Leaders of both companies anticipated a closing by mid-2024 but the FTC expanded its investigation in April, delaying the closing until perhaps late this year. It was the FTC’s second request for information regarding the merger of the two companies.

“Issuance of the Second Request extends the waiting period imposed by the HSR Act until 30 days after Chesapeake and Southwestern have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC,” stated Chesapeake in its SEC filing.