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Exxon’s $60 Billion Pioneer Merger Deal Poised for FTC Approval, Pending Key Condition

5/1/2024

(Reuters) — Exxon Mobil Corp. is set to close its $60 billion acquisition of Pioneer Natural Resources after an agreement with antitrust enforcers that will keep former Pioneer CEO Scott Sheffield off its board, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

The Federal Trade Commission (FTC) will allege that Sheffield engaged in collusive activity with members of the Organization of the Petroleum Exporting Countries (OPEC) that could have raised the price of oil, the Wall Street Journal reported on Wednesday.

The FTC will claim that Sheffield sent hundreds of messages to OPEC representatives that included discussions of market dynamics, including pricing and production levels, the Journal reported.

Sheffield retired as Pioneer’s CEO on Dec. 31, but continued to serve on its board and was due to take a seat on Exxon’s board when the acquisition deal closed.

Pioneer and the FTC both declined to comment.

“We continue to work constructively with the FTC as they conduct a very thorough review,” an Exxon spokesperson said on Wednesday.

During a discussion of Exxon’s first-quarter earnings last week, executives said they had responded to the FTC’s second request for information and received no indications of anti-trust issues.

The agency’s30-day review is expected to wrap up this week.

Exxon CEO Darren Woods said on Friday the company had supplied an enormous “material of documents, contracts, line items on productions and sales.”

“We are very confident that there are no antitrust issues,” he told analysts.

The FTC’s 30-day review period likely began in early April, said Bob Brackett, an analyst with Bernstein investment firm. “Few obstacles remain to an imminent second-quarter close.”

Antitrust experts said in October that despite the size of the proposed Exxon-Pioneer deal, the FTC would struggle to stop it because it is a merger of producers rather than refiners or retail outlets.

Even so, the regulator has stepped up its review of oil and gas deals and sent a second request to both companies last year.

It has also sought additional information from Chevron, Diamondback Energy, Occidental Petroleum and Chesapeake Energy related to their respective acquisitions of rivals.

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