Exxon Mobil is on the verge of announcing its acquisition of U.S. rival Pioneer Natural Resources in a deal estimated at around $60 billion, as reported by multiple media outlets. Upon news of the impending acquisition, Pioneer Natural Resources’ shares experienced a 2.4% increase, while Exxon’s stock saw a 0.5% decline.
This strategic move positions Exxon as the dominant player in the largest U.S. oilfield, securing a decade of cost-effective production. The acquisition is expected to primarily consist of a stock transaction, with Exxon offering over $250 per share for Pioneer, according to sources cited by Reuters and Bloomberg.
If the deal is finalized, it will mark the most significant corporate acquisition of the year and Exxon’s most substantial transaction since its $81 billion acquisition of Mobil Oil in 1998. The merger would consolidate the control of a significant portion of the Permian Basin shale field and its extensive oilfield infrastructure under four of the largest U.S. oil companies.
Analysts at Roth MKM expressed their expectation of a positive reaction from Pioneer’s peers regarding the acquisition. They also suggested that Pioneer is a willing seller, particularly considering the impending retirement of founder and CEO Scott Sheffield. The acquisition is seen as the culmination of a series of strategic deals made by Pioneer since the emergence of horizontal drilling in the Midland Basin in the early 2010s, which established the company as one of the most core inventory-rich exploration and production companies in the prolific U.S. shale oil basin.
However, some analysts at KeyBanc suggested that a price closer to $250 per share may be better received by Exxon shareholders than the proposed $278/share.