New mega-acquisition in American oil, at $22.5 billion

New mega-acquisition in American oil, at $22.5 billion
New mega-acquisition in American oil, at $22.5 billion

The American oil giant ConocoPhillips announced on Wednesday that it wanted to buy its competitor Marathon Oil, valued at 22.5 billion dollars including 5.4 billion in net debt, at a time when the sector is facing pressure on the exit from fossil fuels in the face of climate change. This is part of a series of announcements of large acquisitions in the American oil sector going against calls to begin their energy transition, after ExxonMobil and Pioneer Natural Resources (60 billion dollars), Chevron and Hess (53 billion ), Occidental Petroleum and CrownRock (12 billion).

With Marathon, ConocoPhillips will strengthen itself in regions rich in shale oil and gas such as the Bakken Basin, in the northern United States, or the Permian Basin in the south. The acquisition will allow “to add highly complementary surface areas to ConocoPhillips’ onshore portfolio in the United States, with two billion barrels of additional resources”specify the companies, based in Texas, in a press release.

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$500 million in savings

This “complementarity” should enable ConocoPhillips to achieve $500 million in savings in the year following the transaction, which should be finalized at the end of 2024, in particular thanks to “reduction of administrative costs” and production. The oil giant also plans to continue rewarding its shareholders with share buybacks worth more than $20 billion in the three years following the Marathon Oil takeover, including $7 billion in the first year, according to the press release. In detail, according to the definitive agreement reached for the buyout, Marathon Oil shareholders will receive 0.255 shares of ConocoPhillips per share, representing a premium of 14.7% compared to Marathon Oil’s closing price on Tuesday.

In October, another major American oil group, ExxonMobil, announced that it would buy its compatriot Pioneer Natural Resources for around $60 billion. It was also a question of strengthening itself in the Permian basin, which arouses desire. The major, which assumes investment in the exploitation of hydrocarbons despite the impact on the climate, brings together its shareholders at its general meeting on Wednesday, who will have the opportunity to express themselves on the strong manner in which it reacted to recent protests linked to climate change. At the end of 2023, the other American oil major Chevron also announced the acquisition for $53 billion of the gas and oil producer Hess, and the compatriot Occidental Petroleum that of CrownRock for some $12 billion.

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