Topline
The Federal Trade Commission is set to approve ExxonMobil’s $60 billion takeover of Pioneer Natural Resources, according to multiple outlets, though the deal can reportedly only close if former Pioneer CEO Scott Sheffield, who faces allegations of engaging in activity to raise gas prices, is barred from the combined company’s board of directors.
Key Facts
The deal is set to close after an agreement was reached between Exxon and antitrust regulators to keep Sheffield off the board of directors, The Wall Street Journal reported, adding the FTC will allege Sheffield engaged in collusive activity with the Organization of the Petroleum Exporting Countries that could have raised the price of gas for Americans.
Sheffield will be accused of sending hundreds of messages to OPEC representatives about gas pricing and production levels, the Journal reported.
The caveat against Sheffield is rooted in concerns about a class action price-fixing lawsuit from three drivers accusing the former CEO and Pioneer of colluding with OPEC to raise gas prices, according to Semafor.
The FTC and Exxon didn’t immediately respond to Forbes’ request for comment.
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Tangent
Shares of Exxon and Pioneer slightly slumped Wednesday. Exxon’s stock closed down nearly 2% to $116.03 while Pioneer’s closed down a fraction of a percent to $267.66.
Big Number
$411 billion. That’s the estimated value of Exxon and Pioneer’s potentially combined company.
Key Background
Exxon announced its merger with Pioneer in October, designating it as an all-stock transaction valued at $59.5 billion, or $253 per share, based on Exxon’s closing stock price on Oct. 5. The merger will combine Pioneer’s more than 850,000 acres in west Texas’ Midland Basin with ExxonMobil’s 570,000 acres in the Delaware and Midland Basins of west Texas. Exxon’s production volume would more than double to about 1.3 million barrels of oil equivalent per day once the deal closes, based on 2023 values, according to a statement from the company. The lawsuit keeping Sheffield from joining the combined company’s board alleges he, Pioneer and other oil producers colluded to curb output of shale oil, raising consumer fuel prices, Reuters reported.
Further Reading
Exxon to Close Megadeal, Pioneer CEO to Be Barred from Exxon Board in Deal With FTC (WSJ)
FTC to approve major Exxon deal — but exclude key executive (Politico)
FTC clears Exxon-Pioneer deal but with board twist (Semafor)
