Diamondback Energy will acquire Endeavor Energy Resources in a $26 billion cash-and-stock transaction to establish a dominant drilling company in the Southwest U.S.

The deal includes around 117.3 million shares of Diamondback common stock and $8 billion in cash, with Diamondback shareholders expected to own about 60.5% and Endeavor's equity holders around 39.5% of the merged entity based in Midland, Texas. Both companies' boards have approved the transaction, slated for closure in Q4.