Exxon Mobil, on Wednesday, confirmed its acquisition of Pioneer Natural Resources, a prominent shale competitor, in an all-stock transaction valued at $59.5 billion, equivalent to $253 per share.
In accordance with the terms of the agreement, stockholders of Pioneer will receive 2.3234 shares of Exxon for each Pioneer share they hold. Both companies anticipate finalizing this deal in the first half of 2024, according to a joint statement issued by the companies.
Pre-market trading saw Pioneer shares increase by nearly 2%, whereas Exxon experienced a decline of over 2%.
Exxon announced that, upon the successful completion of this transaction, its production volume in the Permian Basin would surge to 1.3 million barrels of oil equivalent per day. This acquisition marks Exxon’s most significant move since its Mobil takeover.
Exxon Mobil’s CEO, Darren Woods, expressed confidence in the merger’s potential, stating, “The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of achieving independently.”
He also emphasized the environmental aspect, stating, “As importantly, as we look to combine our companies, we bring together environmental best-practices that will reduce our environmental footprint and plan to expedite Pioneer’s net-zero plan from 2050 to 2035.”
Pioneer’s CEO, Scott Sheffield, highlighted the strategic advantages of the merger, noting that it would position the company for “long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain” once the acquisition concludes.
This announcement follows a recent report in The Wall Street Journal indicating that both companies were in the final stages of negotiations, which subsequently resulted in a more than 10% increase in Pioneer’s share price. However, Pioneer’s year-to-date performance only shows a 3.9% gain, while the S&P 500, in comparison, has risen by 13%. Exxon shares have also experienced modest growth in 2023.
