FTC Will Approve Exxon's $60 Billion Merger With Pioneer—With One Caveat

Original source (on modern site) | Article images: [1]

Topline

The Federal Trade Commission said Thursday ExxonMobil's $60 billion takeover of Pioneer Natural Resources is ready for approval, though the deal will only close if former Pioneer CEO Scott Sheffield, who faces allegations of engaging in activity to raise gas prices, is barred from the combined company's board of directors.

Exxon announced the merger in October. (Photo by Brandon Bell/Getty Images)

Getty Images

Key Facts

The deal is set to close after an agreement was reached between Exxon and antitrust regulators to keep Sheffield off the board of directors, the FTC said, alleging Sheffield engaged in collusive activity with the Organization of the Petroleum Exporting Countries that could have raised the price of gas for Americans.

The FTC accused Sheffield of sending hundreds of messages to OPEC representatives about gas pricing and production levels.

The caveat against Sheffield is rooted in concerns about a class action price-fixing lawsuit from three drivers accusing the former CEO and Pioneer of colluding with OPEC to raise gas prices, according to Semafor.

Under the FTC's proposed consent order, Exxon is also prohibited from nominating, designating or appointing any Pioneer employee or director—unless otherwise named—to its board of directors.

The FTC and Exxon didn't immediately respond to Forbes' request for comment.

Get Forbes Breaking News Text Alerts: We're launching text message alerts so you'll always know the biggest stories shaping the day's headlines. Text "Alerts" to (201) 335-0739 or sign up here.

Tangent

Shares of Exxon and Pioneer slightly slumped Wednesday. Exxon's stock closed down nearly 2% to $116.03 while Pioneer's closed down a fraction of a percent to $267.66.

Big Number

$411 billion. That's the estimated value of Exxon and Pioneer's potentially combined company.

Key Background

Exxon announced its merger with Pioneer in October, designating it as an all-stock transaction valued at $59.5 billion, or $253 per share, based on Exxon's closing stock price on Oct. 5. The merger will combine Pioneer's more than 850,000 acres in west Texas' Midland Basin with ExxonMobil's 570,000 acres in the Delaware and Midland Basins of west Texas. Exxon's production volume would more than double to about 1.3 million barrels of oil equivalent per day once the deal closes, based on 2023 values, according to a statement from the company. The lawsuit keeping Sheffield from joining the combined company's board alleges he, Pioneer and other oil producers colluded to curb output of shale oil, raising consumer fuel prices, Reuters reported.

Further Reading

Another Mega-Merger, But ExxonMobil Plus Pioneer Will Be The Influence-Shaper For Oil As Well As Climate (Forbes)

Exxon to Close Megadeal, Pioneer CEO to Be Barred from Exxon Board in Deal With FTC (WSJ)

FTC to approve major Exxon deal — but exclude key executive (Politico)

FTC clears Exxon-Pioneer deal but with board twist (Semafor)

Follow me on Twitter or LinkedIn. Send me a secure tip.

< Back to 68k.news CH front page