Energy
Wednesday, October 11th, 2023 1:57 pm EDT
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.
Exxon Mobil has confirmed its acquisition of Pioneer Natural Resources, a shale rival, in an all-stock deal valued at $59.5 billion or $253 per share. Under the terms of the agreement, Pioneer shareholders will receive 2.3234 shares of Exxon for each Pioneer share they own. The deal, which is the largest for Exxon since its acquisition of Mobil, is set to be finalized in the first half of 2024. Following this acquisition, Exxon’s production volume in the Permian Basin is expected to more than double to 1.3 million barrels of oil equivalent per day. Both companies see this merger as a way to create long-term value and reduce their environmental footprint through shared best practices. Pioneer’s CEO, Scott Sheffield, believes the combined entity will be better positioned for success on a global scale and offer diversified exposure to the energy value chain. This announcement follows reports of the deal’s impending closure, and Pioneer’s stock has seen an increase of over 10% since then, although its year-to-date performance has been modest compared to the S&P 500’s gains.
For full original article on CNBC, please click here: https://www.cnbc.com/2023/10/11/exxon-mobil-agrees-to-buy-pioneer-natural-resources-for-nearly-60-billion-in-all-stock-merger.html
