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ConocoPhillips to Acquire Marathon Oil in a $22.5 Billion All-Stock Deal

  • May 29, 2024

ConocoPhillips - Marathon Oil Merger

ConocoPhillips (COP) entered into a merger agreement on May 29, 2024, to acquire Marathon Oil Corporation (MRO) in a $22.5 billion all-stock deal, the latest in a series of mega-deals in the oil and gas industry.

Deal Structure:

Under the terms of the agreement, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, for $30.33 per share, representing a premium of 14.67% from the stock’s last close.

Major Oil Industry Mergers:

The deal follows the major acquisitions in the oil and gas industry where major oil producers are acquiring fracking companies to increase their reserves like ExxonMobil’s (XOM) acquisition of Pioneer Natural Resources (PXD), and Chevron’s (CVX) deal for Hess (HES) that the latter’s shareholders approved on May 28.

Company Profile:

Marathon Oil operates in the Bakken basin in North Dakota, the Permian basin in North Delaware, and South Texas’ Eagle Ford basin. Recently, Crescent Energy Company (CRGY) also agreed to acquire SilverBow Resources (SBOW) to form the second-largest operator in the Eagle Ford basin.

Marathon Oil’s EV/EBITDA (TTM) ratio is 4.83, below the sector median of 6.40.

Conversely, ConocoPhillips is a leading global exploration and production company with extensive reserves and operations in 13 countries.

Deal Details and Timeline:

The transaction, which includes $5.4 billion of Marathon’s debt, is expected to close in the fourth quarter of 2024.

ConocoPhillips expects to achieve the full $500 million cost and capital synergy run rate within the first year following the transaction’s closing.

“The transaction is immediately accretive to earnings, cash flows, and distributions per share, and we see significant synergy potential,” said ConocoPhillips chief executive officer, Ryan Lance.

Share Buybacks:

Upon closing of the transaction, ConocoPhillips expects share buybacks to be over $20 billion in the first three years, with over $7 billion in the first full year, at recent commodity prices.

Deal Metrics:

For a deeper understanding of this M&A transaction, please follow the link here to check out the deal metrics:
Deal Metrics for the acquisition of Marathon Oil Corporation (MRO) by ConocoPhillips (COP)

The Deal Metrics page for each merger or acquisition includes:

  • A spread history chart of the merger from announcement through eventual completion or failure.
  • Every event as the merger progresses through the expiration of the HSR period, various regulatory approvals, shareholder votes, etc.
  • News and SEC filings.
  • A history of deal updates.
  • And a whole lot more.

Disclaimer: Please undertake your own due diligence before buying or selling any securities mentioned in this article. We do not guarantee the completeness or accuracy of the content or data provided in this article.

Editor’s Note: Baranjot Kaur contributed to this article