Exxon is later today expected to announce an all-stock acquisition offer for Pioneer Natural Resources, Reuters has reported, citing unnamed sources.
Bloomberg, also citing unnamed sources, said that the deal could be worth $58 billion, with the price per share at $250, representing a 16% premium to Pioneer's closing price last Thursday when the Wall Street Journal reported on the acquisition negotiations.
By Tuesday this week, the stock of the target company had gone up to over $237 per share, Bloomberg noted.
The size of the deal is roughly the same as Exxon's record profit for 2022.
Consolidation has become the preferred method of growth for the large players in the U.S. shale patch. The last two years saw a string of large deals, including Occidental's acquisition of Anadarko for some $38 billion. Pioneer also grew through acquisitions, buying Parsley Energy for over $7 billion in 2020 and DoublePoint Energy for over 6 billion in 2021.
Earlier reports on the tie-up between Exxon and Pioneer said that the deal would be subjected to meticulous scrutiny from antitrust authorities but there was a good chance it would be allowed to proceed, Reuters reported last week.
The reason for this is that the Federal Trade Commission does not have a strong argument against an all-U.S. merger between oil companies. According to legal professionals, the oil industry has already argued successfully that a local merger, even between such large players, would not represent a cause for antitrust concern because of the global nature and size of the oil market.
Also, upstream was not the focus of antitrust authorities' attention when it came to the oil industry.
"This isn't a refinery deal or a retail deal, which are usually the main drivers of antitrust risk. Those are the deals where we see problems," antitrust attorney Andre Barlow told Reuters.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More