Marathon Oil has been acquired by ConocoPhillips in an all-stock deal worth $22.5 billion, the Houston-based rivals announced on Wednesday. The acquisition comes after a series of major consolidations in the oil industry, including ExxonMobil’s $60 billion purchase of Pioneer and Chevron’s takeover of Hess for $53 billion.
ConocoPhillips CEO, Ryan Lance, stated that the acquisition of Marathon Oil will deepen their portfolio and fit within their financial framework by adding high-quality, low-cost supply inventory. The deal includes about $5.4 billion of debt and will see Marathon Oil shareholders receiving 0.255 ConocoPhillips shares for each Marathon share they own, representing a 14.7% premium to the closing price on Tuesday.
The merger is part of a trend among oil giants to invest in renewable energy while still benefiting from high profits and cash reserves due to elevated prices over the years. These acquisitions aim to boost returns for shareholders amidst growing pressure for oil companies to invest more in renewable energy.
Devon Energy was also reportedly competing with ConocoPhillips for weeks to acquire Marathon Oil, indicating a competitive market for major acquisitions in the industry. Other similar deals include Occidental buying CrownRock and Diamondback Energy acquiring Endeavor Energy Partners in billion-dollar cash-and-stock transactions.