The acquisition will create one of the largest independent oil exploration and production companies in North America.
Under the terms of the deal, Plano, Texas-based Denbury plans to pay $50 for each share of Encore, an almost 35% premium to the $37.07 price where Encore shares closed Friday. Encore shareholders will receive $15 in cash and $35 in Denbury's common stock for each of their shares.
Encore has about 52.8 million shares outstanding, giving the equity portion of the deal a value of about $2.64 billion. Denbury also will assume Forth Worth, Texas-based Encore's debt and the value of its minority interest in Encore Energy Partners (ENP) .The merged company will take Denbury's name and will be headquartered in Plano, Texas. Denbury shares closed Friday at $14.60.