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Exxon Mobil Acquires Denbury to Bolster Carbon-Capture Endeavors – Merger Arbitrage Mondays

  • July 17, 2023

New Feature: Merger Calendar

We are very excited to announce the launch of a much awaited feature that multiple premium subscribers have asked for in recent weeks. Starting today, premium members can access a Merger Calendar from here that will allow them to visually see new deal announcements, updates to deals, etc. Clicking on a linked event will take you to the official press release or SEC filing related to the event.

InsideArbitrage Merger Calendar
InsideArbitrage Merger Calendar

You can also search for a specific symbol and all events related to that company will be displayed at the top of the calendar. The merger calendar also looks ahead and includes information about potential shareholder approval dates and HSR expiration dates, provided the information is available from a proxy statement filing.

Now, back to regular programming.

Denbury Inc. (DEN)

Exxon Mobil Corporation (XOM) announced on July 13, 2023, that it has reached a definitive agreement to acquire Denbury (DEN) in an all-stock deal valued at $4.9 billion, equivalent to $89.45 per share based on ExxonMobil’s closing price on July 12, 2023.

Key Highlights

  1. Denbury (DEN) to be acquired by Exxon Mobil Corporation (XOM) for $4.9 billion in an all-stock deal.
  2. A federal judge turned down the FTC’s attempt to halt Microsoft’s (MSFT) colossal $69 billion acquisition of Activision Blizzard (ATVI).
  3. The DOJ is close to deciding whether to challenge Thoma Bravo’s $2.3 billion buyout of ForgeRock (FORG).
  4. U.S. Senator Elizabeth Warren and three other lawmakers are urging the Defense Department to conduct a comprehensive review of L3Harris Technologies’ (LHX) $4.7 billion acquisition of Aerojet Rocketdyne Holdings (AJRD).

Headquartered in Plano, Texas, Denbury Inc. is an independent oil and natural gas company. The company, a seasoned developer specializing in carbon capture, utilization, and storage (CCUS) solutions and enhanced oil recovery, focuses on the exploration, production, and development of oil and natural gas properties in the Gulf Coast region of the United States. The company is known for its enhanced oil recovery (EOR) operations, where it utilizes carbon dioxide (CO2) injection to extract additional oil from mature oil fields.

Denbury - A Carbon Solutions Company

Carbon capture, utilization, and storage (CCUS) technologies involve trapping carbon dioxide emissions, typically from significant industrial sources such as power plants and factories.

Currently, a considerable portion of the captured carbon dioxide is utilized for enhanced oil recovery, boosting oil production from wells. Additionally, it is used in the production of fertilizers. Another method involves piping the gas underground into geological formations, including oil-and-gas reservoirs or saline aquifers, as outlined by the International Energy Agency.


Due to its significant use of CO2 for enhanced oil recovery, Denbury has positioned itself as an environmentally conscious company that aims to reduce greenhouse gas emissions. The company sources its CO2 from natural geological formations or industrial sources, and the injection of CO2 into reservoirs has the dual benefit of increasing oil recovery while sequestering CO2 underground.

What is the reason behind Exxon’s acquisition of Denbury?

Denbury’s primary revenue source comes from enhanced oil recovery, a technique that Exxon has a well-established history of using. However, for Exxon, this acquisition aligns with a broader strategy to maintain profitability amid global climate targets set by countries.

Instead of venturing into solar and wind power production, Exxon is placing its bet on continued oil and gas extraction, as long as emissions from power plants and factories are effectively capped.

To expand its involvement in the CO2 transportation and storage sector, Exxon is acquiring Denbury, which owns 1,300 miles of carbon dioxide pipelines, primarily covering areas in Louisiana, Texas, and Mississippi. Furthermore, Denbury currently operates 10 sites dedicated to carbon storage, making it an attractive opportunity for Exxon to strengthen its presence in this field.

The deal between Exxon and Denbury is at a very small premium to Denbury’s pre-deal share price and could face some pushback from shareholders, although this is not reflected in the deal price. Denbury’s current share price trades close to the value of 0.84 Exxon Mobil shares plus two quarters of dividends. The acquisition is likely to benefit Exxon Mobil’s Low Carbon Solutions business, although its overall impact on Exxon Mobil’s intrinsic value should be minimal due to the relatively small deal size compared to the company’s scale.

The deal is expected to be completed in the fourth quarter of 2023, and the current spread on the deal is 2.32%.

Merger Arbitrage activity remained unchanged last week with two new deals announced and two deals closing.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.

Merger Arbitrage

Deal Statistics:

Total Number of Deals Closed in 202393
Total Number of Deals Not Completed in 20236
Total Number of Pending Deals
Cash Deals39
Stock Deals18
Stock & Cash Deals5
Special Conditions6
Total Number of Pending Deals68
Aggregate Deal Consideration$709.22 billion

New Merger Arbitrage Deals:

  1. The acquisition of Liminal BioSciences (LMNL) by Structured Alpha LP for $8.50 per share in cash. We added LMNL as a potential deal to the Deals in the Works section on April 5, 2023, and the price after the news of the potential deal came out was $6.72.
  2. The acquisition of Denbury (DEN) by Exxon Mobil Corporation (XOM) for $4.9 billion in an all stock deal. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.

Deal Updates:

  1. On July 10, 2023, Nano Dimension (NNDMboosted its special tender offer price for Stratasys (SSYS) to $24 per share from $20.05. In response to the offer, CEO Yoav Zeif said that the company’s Board will review and evaluate the revised partial tender offer and that the unanimous approval, recommendation, and declaration of the advisability of the company’s combination with Desktop Metal (DM) by the Stratasys Board remains unchanged.
  2. According to an SEC filing, filed on July 10, Novartis (NVS) and Chinook (KDNY) were to file their PreMerger Notification and Report Forms on or before June 30, 2023, in connection with the Merger.
  3. July 11, 2023: According to Bloomberg, Microsoft (MSFTwon a court’s okay to move forward with its deal to buy Activision Blizzard (ATVI), defeating an effort by the FTC to block the largest-ever gaming deal.
  4. July 11, 2023: According to Bloomberg, Broadcom’s (AVGO) acquisition of VMware (VMWis poised to be approved by European Union’s merger officials, paving the way for the world’s biggest-ever takeover for a semiconductor maker.
  5. On July 14, 2023, Seagen (SGEN) and Pfizer (PFE) each received a request for additional information and documentary materials from the FTC in connection with the FTC’s review of the merger. In addition, as previously disclosed, on June 1, 2023, Seagen and Pfizer referred the Merger to the European Commission for review under Article 4(5) of the EU Merger Regulation. On June 23, 2023, the EC accepted jurisdiction as a result of such referral, and receipt of approval from the EC for the Merger has become a condition for the closing of the Merger.
  6. On July 14, 2023, Arconic Corporation (ARNC) and Apollo Global Management (APO) said that they currently expect to complete the merger in the third quarter of 2023.
  7. July 14, 2023: Quotient Technology (QUOT) by Neptune Retail Solutions made the filings required under the HSR Act on June 30, 2023, and the initial 30-day waiting period is set to expire on July 31, 2023.


  1. On July 11, 2023, NBT Bancorp (NBTB) announced that it has received regulatory approval to complete the proposed merger of Salisbury Bancorp (SAL). The merger is expected to close on August 11, 2023.
  2. On July 12, 2023, The European Commission approved, under the EU Merger Regulation, the proposed acquisition of VMware (VMW) by Broadcom (AVGO).
  3. On July 12, 2023, Absolute Software Corporation (ABST) announced that it has obtained a no objection notification under Australia’s Foreign Acquisitions and Takeovers Act 1975 (the “FATA”) in connection with the previously announced acquisition of all of the outstanding shares of Absolute by Crosspoint Capital Partners.
  4. On July 13, 2023, shareholders of Reunion Neuroscience (REUNvoted in favor of a special resolution to approve the proposed plan of arrangement, whereby affiliates of MPM BioImpact would acquire Reunion in an all-cash transaction. The Arrangement is expected to be completed on or around July 21, 2023.
  5. On July 13, 2023, Tessco (TESS) stockholders approved the merger transaction between Tessco and entities affiliated with Lee Equity Partners LLC and Twin Point Capital LLC. The merger is expected to be completed on July 17, 2023.
  6. On July 13, 2023, Activision Blizzard (ATVI) CCO and EVP of Corporate Affairs Lulu Cheng Meservey mentioned on Twitter that the Turkish Competition Authority (Rekabet Kurumu) ruled in favor of the company’s acquisition by Microsoft (MSFT).
  7. On July 14, 2023, shareholders of Infinity Pharmaceuticals (INFIadopted the previously announced merger agreement with MEI Pharma (MEIP). The transaction remains subject to approval by MEI stockholders.
  8. On July 14, 2023, shareholders of Focus Financial Partners (FOCSapproved the merger agreement with Clayton, Dubilier & Rice, LLC and Stone Point Capital LLC for $7 billion or $53 per share in cash.


  1. July 10, 2023: According to Reuters, The U.S. Department of Justice (DOJ) is nearing a decision on whether to challenge private equity firm Thoma Bravo’s $2.3 billion buyout deal for ForgeRock (FORG).
  2. July 11, 2023: According to Reuters, U.S. Senator Elizabeth Warren joined three other lawmakers to urge the Defense Department to thoroughly review defense contractor L3Harris Technologies’ (LHX) $4.7 billion deal for Aerojet Rocketdyne Holdings (AJRD).
  3. On July 11, 2023, NexPoint Event Driven Fund issued a demand letter to the Board of Directors of Paratek Pharmaceuticals (PRTK) to make available all books and records surrounding the proposed acquisition of the company in order to investigate whether any board members breached their fiduciary duties in connection with the proposed acquisition.
  4. July 12, 2023: According to Reuters, UK’S CMA said that a restructured deal between Microsoft (MSFT) and Activision Blizzard (ATVIcould satisfy its concerns, subject to a new investigation, a climbdown in its opposition to the biggest gaming deal in history.
  5. July 12, 2023: According to Bloomberg, the US FTC filed a notice in court that it intends to appeal a ruling by a federal judge in California allowing Microsoft (MSFT) to move forward with its acquisition of Activision Blizzard (ATVI).
  6. July 13, 2023: According to Reuters, a U.S. federal court rejected the FTC’s request that it order Microsoft (MSFT) to temporarily hold off on closing its purchase of Activision Blizzard (ATVI).
  7. July 13, 2023: According to Bloomberg, Microsoft (MSFT) and Activision Blizzard (ATVI) are considering giving up some control of their cloud-gaming business in the UK to appease regulators so they can complete their merger.
  8. July 14, 2023: According to Reuters, Britain’s competition regulator extended its final deadline on Microsoft’s (MSFT) Activision Blizzard (ATVI) deal to Aug. 29 after it received a “detailed and complex” new proposal from Microsoft that claimed material changes in circumstance.

Shareholders Meeting Schedule:

  1. Chinook Therapeutics (KDNY) – August 2, 2023
  2. Urstadt Biddle Properties (UBP) – August 16, 2023
  3. Greenhill & Co (GHL) – August 16, 2023
  4. Franchise Group (FRG) – August 17, 2023.
  5. Magellan Midstream Partners (MMP) – September 21, 2023
  6. MEI Pharma (MEIP) postponed its special meeting in connection with the proposed transaction with Infinity Pharmaceuticals (INFI), to July 23, 2023.

Closed Deals:

  1. The acquisition of IVERIC bio (ISEE) by Astellas Pharma on July 11, 2023. It took 72 days for this deal to be completed.
  2. The acquisition of GasLog Partners (GLOP) by GasLog on July 13, 2023. It took 98 days for this deal to be completed.

Weekly Spread Changes:

The table below shows weekly spread changes between July 7, 2023, and July 14, 2023.

Company Quote
Last Week
Spread Change
INFI0.2002MEI Pharma, Inc. (MEIP)7.4493.25%55.04%38.21%All Stock
DM1.83Stratasys Ltd. (SSYS)20.3736.91%23.57%13.34%All Stock
SURF0.9115Coherus BioSciences, Inc. (CHRS)4.0620.68%17.05%3.63%Special Conditions
PTRS6.21LINKBANCORP, Inc. (LNKB)5.868.52%5.86%2.66%All Stock
SGTX21.25Eli Lilly and Company (LLY)449.46-29.79%-32.43%2.64%Special Conditions
SGEN198Pfizer Inc. (PFE)36.3215.66%19.58%-3.92%All Cash
IRBT47.92Amazon (AMZN)134.6827.30%31.55%-4.25%All Cash
TSEM37.5Intel Corporation (INTC)33.1541.33%49.00%-7.67%All Cash
VMW156.23Broadcom Inc. (AVGO)888.58-8.79%0.78%-9.57%Special Conditions
ATVI90.07Microsoft Corporation (MSFT)345.245.47%15.25%-9.78%All Cash

Top 10 Merger Arbitrage Deals With The Largest Spreads:

Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.

INFI02/23/2023MEI Pharma, Inc. (MEIP)$0.39$0.200209/30/202393.25%447.83%
SIMO05/05/2022MaxLinear, Inc. (MXL)$106.07$63.2508/07/202367.70%1123.26%
SAVE07/28/2022JetBlue Airways Corporation (JBLU)$31.00$19.0406/30/202462.82%65.51%
TSEM02/15/2022Intel Corporation (INTC)$53.00$37.508/15/202341.33%502.89%
DM05/25/2023Stratasys Ltd. (SSYS)$2.51$1.8312/31/202336.91%80.20%
IRBT08/05/2022Amazon (AMZN)$61.00$47.9208/05/202327.30%498.14%
ACI10/14/2022The Kroger Co. (KR)$27.25$21.9303/31/202424.26%34.19%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$76.01$61.2608/04/202324.08%462.68%
SURF06/16/2023Coherus BioSciences, Inc. (CHRS)$1.10$0.911509/30/202320.68%99.32%
SGEN03/13/2023Pfizer Inc. (PFE)$229.00$198.0001/31/202415.66%28.72%

Deals In The Works

Five new potential Merger Arbitrage deals were added to the ‘Deals In The Works‘ section last week.

  1. On July 5, 2023, Histogen (HSTO) announced that it has completed a review of its business, and plans to commence a process to explore strategic alternatives.
  2. On July 10, 2023, CalAmp (CAMP) announced the company’s Board of Directors has engaged advisors and formed a special committee to explore all strategic alternatives.
  3. July 11, 2023: According to Bloomberg, Avantax (AVTA), a provider of wealth-management software and services, is exploring options including a potential sale.
  4. On July 12, 2023, AVROBIO (AVRO) announced to halt further development of its programs and to conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value.
  5. July 14, 2023: According to Reuters, MoonLake Immunotherapeutics (MLTX) a developer of an antibody-derived treatment for inflammatory skin conditions, is exploring a sale.


  1. China Merchants Group made a $3.4 billion takeover bid for Chindata Group Holdings (CD).
  2. Wildcat Capital Management issued a letter to Consolidated Communications’ (CNSL) special committee urging it to reject the recent take private proposal at $4.00 per share.
  3. China Merchants Capital Holdings
  4. 3D Systems (DDD) increased its cash and stock offer for Stratasys (SSYS) to $24.07 a share.
  5. Echo Lake Capital has increased its offer to acquire biotech business Quince Therapeutics (QNCX) to $1.80 per share.

SPAC Arbitrage


  1. On July 11, 2023, Bowen Acquisition Corp (BOWNU) priced its initial public offering of $60 million.

SPAC Business Combination

  1. On July 11, 2023, AltC Acquisition Corp. (ALCC) and Oklo Inc., an advanced fission technology and nuclear fuel recycling company entered into a definitive business combination agreement.


  1. On July 10, 2023, Galata Acquisition Corp. (GLTA) announced the closing of its previously announced business combination with Marti Technologies Inc. (MRT).
  2. On July 14, 2023, Alpha Healthcare Acquisition Corp. III (ALPAannounced the successful completion of its business combination with Carmell Therapeutics Corporation (CTCX).

List of all pending Merger Arbitrage deals:

Disclaimer: I have long positions in Activision Blizzard (ATVI), Spirit Airlines (SAVE) and Tower Semiconductor (TSEM). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.