Source: Zhitong Finance
ExxonMobil's major deal to acquire Pioneer Natural Resources for $60 billion will be approved by antitrust regulators before the end of June.
$Exxon Mobil (XOM.US)$It is expected that although the US government is strengthening its scrutiny of mergers and acquisitions, it will be acquired for 60 billion US dollars$Pioneer Natural Resources (PXD.US)$The large-scale deal will be approved by antitrust regulators before the end of June.
The company's chief financial officer Kathy Mickles emphasized in an interview: “We expect this deal to be approved within the second quarter, which is in line with our expectations because in reality this deal did not touch on any major antitrust issues.” She added that ExxonMobil and its combined production share in the US oil and gas market will be only 5%.
In October of last year, ExxonMobil announced the acquisition of Pioneer Natural Resources through an all-stock exchange. Based on ExxonMobil's closing price on October 5, the transaction price was 59.5 billion US dollars, or 253 US dollars per share. According to the terms of the deal, Pioneer Natural Resources shareholders will exchange each Pioneer share for 2.3234 ExxonMobil shares at the end of the transaction. Including net debt, the implied total corporate value of the transaction was approximately US$64.5 billion.
If finalized, the merger would make ExxonMobil the largest player in the Permian Basin in Texas and New Mexico, and bring the company's production to nearly 4.5 million barrels of oil equivalent per day, 50% higher than the second-largest supergiant. According to the statement, the merged company will control crude oil reserves equivalent to 16 billion barrels in the Permian region.
According to information, the merger between ExxonMobil and Pioneer Natural Resources will also be the biggest step for oil giants to enter the Permian Basin and will integrate large areas of the Permian Basin. Previously, production in the Permian Basin had always been scattered, and was mainly the site of independent producers. When shale oil production in the basin began to surge around 2005, big companies like ExxonMobil were nowhere to be found.
Since then, the Federal Trade Commission (FTC) has twice requested more information for review. In March of this year, more than 50 lawmakers publicly called on the FTC to conduct stricter scrutiny of mergers and acquisitions in the oil and gas industry, fearing that these deals could lead to higher consumer prices and lower wages.
“We are maintaining productive communication with the Federal Trade Commission staff,” Mickles said.
ExxonMobil believes the acquisition will help reduce operating costs, increase US energy production, and accelerate Pioneer's goal of achieving net zero emissions.