Exxon Mobil agrees to buy Pioneer Natural Resources for nearly $60 billion in all-stock merger

Key Points

• Acquisition Deal: Exxon Mobil has agreed to acquire Pioneer Natural Resources, a shale rival, in an all-stock deal valued at $59.5 billion, equivalent to $253 per share. This marks Exxon’s largest acquisition since its purchase of Mobil.
• Deal Terms and Benefits: Under the agreement, Pioneer shareholders will receive 2.3234 shares of Exxon for each Pioneer share they own. The deal is expected to close in the first half of 2024. The acquisition is projected to significantly increase Exxon’s production volume in the Permian Basin to 1.3 million barrels of oil equivalent per day. Both companies believe that their combined capabilities will generate long-term value that surpasses what they could achieve individually. They also intend to implement environmental best practices to reduce their environmental footprint, accelerating Pioneer’s net-zero plan from 2050 to 2035.
• Market Response and Background: Pioneer’s shares saw a nearly 2% increase in premarket trading, while Exxon’s shares were down by more than 2% following the announcement. The acquisition follows reports that both companies were nearing a deal, resulting in a more than 10% increase in Pioneer’s shares since those reports. However, Pioneer’s year-to-date performance has been modest, with only a 3.9% increase, while the S&P 500 index rose by 13% during the same period, and Exxon’s shares have also faced challenges in 2023.