ConocoPhillips purchases Marathon Oil in $22.5 billion stock transaction

ConocoPhillips to Acquire Marathon Oil in $22.5 Billion Deal

In a move that is set to reshape the US oil sector, ConocoPhillips has announced its agreement to acquire Marathon Oil in an all-stock deal valued at $22.5 billion, including debt. This acquisition will provide Conoco, one of the world’s largest independent oil and gas producers, with a wide range of assets from North Dakota to Texas, bolstering its position in the lucrative American shale fields.

The negotiations between the two companies were first reported by the Financial Times, with Conoco’s CEO, Ryan Lance, highlighting that the deal will “further deepen our portfolio” by adding “high-quality, low-cost supply inventory adjacent to our leading US unconventional position.” The transaction is expected to close in the fourth quarter and is part of a trend of major oil companies consolidating to secure the best remaining shale resources.

This deal comes on the heels of other significant acquisitions in the sector, with ExxonMobil and Chevron announcing deals worth $60 billion and $53 billion last October. Conoco, with a market capitalization of over $130 billion, had been in competition with Devon Energy to acquire Marathon.

Under the agreement, Marathon shareholders will receive 0.255 Conoco shares for each Marathon share, representing a 14.7% premium to Marathon’s closing price on May 28. Following the announcement, Marathon shares rose 8.4% in New York, while Conoco shares fell 3.1%.

This acquisition marks a significant milestone for Conoco, which had previously lost out on a bid for Endeavor Energy Resources to Diamondback Energy. Marathon’s CEO, Lee Tillman, expressed confidence in the deal, stating that the combined assets and team with ConocoPhillips will deliver long-term shareholder value. The transaction is being advised by Morgan Stanley and Kirkland & Ellis for Marathon, and Evercore and Wachtell, Lipton, Rosen & Katz for Conoco.