Yahoo FinanceExxon Set to Win FTC Approval for Pioneer Deal on Settlement

(Bloomberg) -- The US Federal Trade Commission is poised to greenlight Exxon Mobil Corp.’s $60 billion purchase of Pioneer Natural Resources Co. after the companies agreed to minor concessions, according to people familiar with the matter.
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An announcement may come within days, the people said. The deal will make Exxon far and away the biggest oil and natural gas producer in the Permian Basin, North America’s largest US oil field.
Pioneer shares that had been down more than 2% on the day reversed those losses and were trading up as much as 0.9% on the news. Hess Corp, the target of a separate Big Oil takeover bid, also climbed 0.9%.
More than 50 lawmakers urged the FTC in March to increase scrutiny on concerns a $230 billion wave of consolidation in would increase energy prices for consumers, squeeze suppliers and suppress wages. Investors had feared the agency, which has become more aggressive under Chair Lina Khan, would stand in the way of several large deals, especially in an election year when the Biden administration is seeking to prove its climate credentials and contain gasoline prices.
Chevron Corp., Occidental Petroleum Corp. and Chesapeake Energy Corp. are among companies with large pending takeovers that are undergoing in-depth reviews before the FTC.
Exxon declined to comment.
Oil executives claim the deals will benefit shareholders, consumers and the environment. Exxon Chief Executive Officer Darren Woods has said the Pioneer deal would lower its cost of production, making US barrels more competitive in the global market, and provide a strong platform for growth, which would ultimately benefit consumers. Exxon also pledged to reduce climate-warming emissions from Pioneer operations to net zero by 2035, accelerating the prior target by 15 years.
The Biden administration has frequently been at odds with the oil industry, but easing through what many executives see as necessary consolidation is likely to improve relations. With domestic crude prices up roughly 14% this year and tensions rising the Middle East, the administration is vulnerable to Republican attacks on measures that hurt the oil industry and raise fuel prices.
The Pioneer deal will combine two fast-growing Permian operations, lifting Exxon’s production in the basin to the equivalent of about 2 million barrels a day by 2027, up from about 600,000 last year.