Centennial, Colgate Energy’s $4 Billion Betrothal a Suitable Match

Centennial Resource Development Inc.’s recently announced merger with Colgate Energy—with Centennial offering a $3.9 billion dowry in cash and stock—looked to be almost inevitable.

The deal addresses Centennial’s inventory concerns, comes without overpaying and spares Colgate Energy from a potentially uphill IPO climb.

Gabe Daoud Jr., an analyst at Cowen, pegged Colgate Energy as a potential acquisition target for Centennial last August, noting that Colgate’s acreage “fit like a glove.”