Exxon Mobil (NYSE:XOM) announced today the much-discussed acquisition of U.S. rival Pioneer Natural Resources (NYSE:PXD) for $59.5 billion.
Exxon will pay $253 per share to acquire Pioneer, the company said today.
PXD shares rose 2.3% on the news, while Exxon stock fell 1.1%.
“We expect PXD to have a positive reaction vs. peers,” Roth MKM analysts wrote in a note.
This strategic move positions Exxon as the dominant player in the largest U.S. oilfield and secures a decade of cost-effective production.
If realized, this acquisition would be the most significant corporate deal of the year and Exxon's most substantial since its $81B acquisition of Mobil Oil in 1998.
The merger would leave four of the largest U.S. oil companies in control of a significant portion of the Permian Basin shale field and its extensive oilfield infrastructure.
“We maintain that Pioneer is a willing seller, given the imminent retirement of founder/CEO Scott Sheffield. This final transaction would be the last of many savvy deals for him since the advent of horizontal drilling in the Midland Basin in the early 2010s, which established Pioneer as one of the most core inventory-rich E&Ps in the most prolific U.S. shale oil basin,” KeyBanc analysts wrote.
“We believe a price closer to $250 than $278/share may be better received by XOM shareholders,” the analysts added.