ConocoPhillips Acquires Marathon Oil in $17.1 Billion Deal amid Rising Energy Prices and Record Profits

ConocoPhillips announced a major acquisition of Marathon Oil in an all-stock deal valued at approximately $17.1 billion, with the total value reaching $22.5 billion when factoring in debt. This move comes as energy prices continue to rise, with crude prices surging more than 12% this year and exceeding $80 per barrel. The energy sector has seen a wave of mergers and acquisitions as companies capitalize on the current market conditions.

This acquisition follows similar moves in the industry, such as Chevron’s $53 billion acquisition of Hess and Exxon Mobil’s acquisitions of Denbury Resources and Pioneer Natural Resources. However, these deals may face challenges due to increased antitrust scrutiny under the Biden administration, which has been ramping up reviews of mergers in various sectors, including energy and tech.

The Federal Trade Commission has requested additional information from Exxon and Pioneer regarding their proposed deal, a standard step in antitrust reviews. ConocoPhillips’ acquisition of Marathon Oil is expected to add valuable acreage to its U.S. onshore portfolio, enhancing its position in the market. The deal is set to close in the fourth quarter pending approval from Marathon Oil shareholders.

ConocoPhillips also announced plans to increase its dividend by 34% and initiate a significant share buyback program once the Marathon Oil deal is finalized. Despite the news, ConocoPhillips’ stock declined while Marathon Oil’s stock saw a notable increase. The energy sector continues to see significant activity as companies navigate changing market dynamics and regulatory landscapes.