ConocoPhillips to buy Marathon Oil in $22.5 billion deal

[May 29, 2024]  (Reuters) -ConocoPhillips said on Wednesday it would buy Marathon Oil in a $22.5 billion all-stock deal.
 
Under the terms of the agreement, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips for each share of Marathon Oil common stock, a 14.7% premium to the closing share price of Marathon Oil on May 28, 2024.  

The logo of American oil and natural gas exploration and production company ConocoPhillips is seen during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/file photo

Share of Marathon Oil were up nearly 6% premarket.

The U.S. oil and gas industry has been riding a consolidation wave over the last two years, with 2023 being one of the most active where M&A deals worth $250 billion were struck by companies. The momentum has carried over into this year as stock market's continue to boom.

However, the consolidation activity is attracting increased antitrust scrutiny, with the FTC reviewing multi-billion dollar deals, including those involving Chevron, Diamondback Energy, Occidental Petroleum and Chesapeake Energy.

Bloomberg News reported in October last year that Devon Energy had held preliminary talks about combining with Marathon Oil.

Marathon Oil's first-quarter oil production was down 2.7% to 181,000 barrels per day (bpd), compared with a year earlier.

It has operations in the Bakken basin in North Dakota, in the Permian basin in North Delaware, and in South Texas' Eagle Ford basin - basins which are prime targets for producers looking to increase their inventory.

ConocoPhillips said that it expects to achieve the full $500 million of cost and capital synergy run rate within the first full year following the closing of the transaction.

Advanced deal talks between the two companies were first reported by the Financial Times late on Tuesday.

(Reporting by Seher Dareen and Gnaneshwar Rajan in Bengaluru; Editing by Mrigank Dhaniwala and Anil D'Silva)

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