www.investing.com — Exxon Mobil (NYSE: XOM) announced today the $59.5 billion acquisition of US competitor Pioneer Natural Resources (NYSE: PXD).
Exxon will pay $253 per share for Pioneer, the firm said today.
Exxon shares fell more than 4% in early U.S. trade on Wednesday, while Pioneer stock jumped slightly less than 1%.
This strategic approach establishes Exxon as the dominant player in the biggest oilfield in the United States and assures a decade of cost-effective production.
If completed, this would be the largest corporate transaction of the year and Exxon’s largest since its $81 billion acquisition of Mobil Oil in 1998. The merger would give four of the top oil firms in the United States ownership of a large piece of the Permian Basin shale region and its enormous oilfield infrastructure.
“Given the impending retirement of founder/CEO Scott Sheffield, we believe Pioneer is a willing seller.” This final transaction would be the last of many savvy deals for him since the early 2010s when horizontal drilling in the Midland Basin established Pioneer as one of the most core inventory-rich [exploration and production companies] in the most prolific U.S. shale oil basin,” KeyBanc analysts wrote.
“We believe a price closer to $250 than $278/share may be better received by [Exxon] shareholders,” the analysts added.
Any combination would almost certainly be scrutinized by US competition officials, who have recently increased their scrutiny of high-profile business mergers.
