ConocoPhillips has agreed to buy Marathon Oil (NYSE:MRO) in a $17 billion all-stock deal.
Originally reported by the Financial Times, citing people briefed on the matter, the newspaper said that the deal would value the Houston-based company at over its $15 billion market value.
The $17bn price tag places a value of $22.5bn on the company, including debt.
“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading US unconventional position,” said ConocoPhillips chairman and chief executive officerRyan Lance.
“Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential.”
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, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted average price.
The transaction is subject to the approval of Marathon Oil stockholders, regulatory clearance and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2024.
Buying spree
Bloomberg News had previously reported that Devon Energy was considering combining with Marathon Oil.
The acquisition would add Marathon’s assets across the Bakken oilfield and Permian basin to ConocoPhillips’s, along with international operations in countries including Equatorial Guinea.
The Financial Times added that acquiring Marathon would be ConocoPhillips’s biggest purchase since its $10bn Concho Resources purchase in 2020.
A potential merger between the two would be the latest in a series of mergers and acquisitions in the US energy market in recent months.
In October, ExxonMobil purchased Pioneer Natural Resources for $60bn, while Chevron paid $53bn to buy Hess.
North Sea history
Marathon Oil was a major operator in the UK North Sea, with its portfolio including a 40% stake in the Brae Alpha complex, as well as 28% and 47% respectively in Foinaven and Foinaven East.
However, the group has since exited the region as it looked to focus investment on US shale.
In February 2019, the group divested its stakes to London-headquartered RockRose Energy for £107m, which also included interests in the SAGE, Brae-Forties and WOSPS pipeline systems.
In addition, Marathon’s assets and teams in Aberdeen, Peterhead switched to RockRose, adding 250 employees in the north-east of Scotland to its workforce.
However, in 2020 RockRose agreed to relinquish control of the Greater Brae Area (GBA) to its partner Taqa
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