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ConocoPhillips to buy Marathon Oil in $22.5 bln deal

STORY: Oil giant ConocoPhillips on Wednesday agreed to buy Marathon Oil in a $22.5 billion deal....

the latest in a series of mega-mergers in the oil and gas industry as companies look to boost their reserves.

Conoco's all-stock offer equates to more than $30 per Marathon share, representing a premium of nearly 15% as of the stock's Tuesday close, according to Reuters calculations.

The acquisition adds over 2 billion barrels of reserves to Conoco's portfolio.

Marathon has operations in North Dakota and Texas - regions that are prime targets for producers looking to increase their inventory.

The U.S. oil and gas industry has been riding a consolidation wave over the last two years as the stock market continues to boom and as U.S. oil production scales new records.

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The deal follows Exxon's acquisition of Pioneer Natural Resources that was announced in October, and Chevron's proposed $53 billion merger with Hess that was approved by the latter's shareholders on Tuesday.

But consolidation activity in the industry has attracted increased antitrust scrutiny, with the FTC reviewing multi-billion dollar deals.

Conoco expects cost savings of $500 million within the first full year after completing the Marathon acquisition, expected to take place in the fourth quarter of 2024.

Shares of Conoco were down roughly 4% in Wednesday morning trading, while Marathon shares rose nearly 8%.