ConocoPhillips has announced a $22.5 billion deal to purchase Marathon Oil, marking a significant consolidation in the energy sector. The all-stock transaction aims to boost shareholder value and enhance the companies’ portfolios.
ConocoPhillips has announced its agreement to purchase Marathon Oil in an all-stock transaction valued at $22.5 billion, including $5.4 billion of debt. This merger grants Marathon Oil shareholders 0.255 ConocoPhillips shares for each Marathon share, equating to a 14.7% premium based on Marathon’s closing price on Tuesday.
ConocoPhillips and Houston-based Marathon Oil aim to complete the deal by the fourth quarter of 2024, pending shareholder and regulatory approval. The acquisition aligns with a recent surge in mergers within the oil industry, following notable deals like ExxonMobil’s $60 billion purchase of Pioneer Natural Resources and Chevron’s $53 billion deal for Hess Corporation.
ConocoPhillips CEO Ryan Lance emphasized that the acquisition would enhance the company’s portfolio with high-quality, low-cost inventory. Marathon Oil’s CEO Lee Tillman expressed confidence in the potential long-term shareholder value resulting from the merger.
ConocoPhillips projects savings of $500 million within the first year post-closure and plans substantial stock repurchases totaling over $20 billion in three years. The merger continues the trend of consolidation in the U.S. energy sector, driven by elevated oil prices and substantial company profits.
