Antitrust enforcers are investigating Exxon Mobil’s nearly $60 billion merger with Pioneer Natural Resources, which is set to be the largest oil and gas deal in the last two decades.
The Federal Trade Commission is requesting further information from both companies on the merger, according to a filing disclosed by Pioneer on Tuesday. This is a step the agency usually takes when it is reviewing if a merger could be anti-competitive.
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In an email sent to employees, Pioneer President and Chief Operating Officer Richard Dealy said the company will “work diligently” to provide regulators with the information they are requesting but stated that the closing of the deal is “still expected to occur by the end of June 2024.”
“The closing remains subject to receipt of required regulatory and shareholder approvals and satisfaction or waiver of other closing conditions,” the email reads. “It is important to remember that we remain separate companies and must continue to operate independently until the transaction closes.”
The FTC can sue to block a merger in court or clear the deal by declining to take action. Companies sometimes cancel deals when they learn an antitrust agency plans to sue to try to kill the deal.
In October, Exxon announced it would be buying Pioneer in a $59.5 billion all-stock deal — the company’s largest acquisition since its $75 billion merger with Mobil in 1998 and the biggest merger this year. The takeover would secure Exxon’s status as the largest player in the fracking industry, covering more ground in the Permian Basin of West Texas.
Exxon previously stated the merger would streamline the resources of the two companies while expecting a cost of supply of less than $35 per barrel from Pioneer’s assets.
In November, a group of Senate Democrats led by Majority Leader Chuck Schumer wrote to FTC chairwoman Lina Khan expressing concerns about the Exxon-Pioneer deal, saying the merger is “likely to harm competition, risk increased consumer prices, and reduced output through the United States.”
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At the news of the FTC’s investigation, Schumer praised the move, underling that the agency is well within its right to investigate the merger if it could lead to higher gas prices or threaten competition.
“I look forward to following this investigation closely, and will encourage the FTC to block the deal if they find any antitrust laws are being violated,” Schumer said in a statement Tuesday.
