FTC Investigating Exxon’s $60 Billion Deal for Pioneer
Summary
The regulator is seeking more information from the oil producers about the megadeal.
U.S. antitrust enforcers are investigating Exxon Mobil’s plan to acquire Pioneer Natural Resources, which would be the largest oil-and-gas deal in two decades, according to securities filings.
The Federal Trade Commission has sought additional information from the companies about the deal, a step it takes when reviewing whether a merger could be anticompetitive under U.S. law, Pioneer disclosed in a filing Tuesday. Merger investigations on average take about 10 months to complete, according to data compiled by law firm Dechert.
The FTC, which shares antitrust authority with the Justice Department, can sue in court to block a merger or decline to take action, effectively clearing the deal. Companies sometimes cancel deals when they learn an antitrust agency plans to sue to stop the transaction.
Exxon in October proposed to buy Pioneer in a $59.5 billion all-stock deal, a takeover that would make Exxon the largest oil producer in the Permian Basin of West Texas and New Mexico, the most active U.S. oil field. It would be Exxon’s largest deal since its $75 billion merger with Mobil in the late 1990s.
Some analysts have argued the companies together make up a negligible portion of global oil production, and that the deal couldn’t impact prices for oil or fuel. The company said it could save billions of dollars in value via synergies by bringing Exxon’s operations to Pioneer’s land, and played down the need to make cuts to head count.
Exxon Chief Executive Darren Woods said the deal would increase U.S. energy security and benefit consumers by bringing the oil giant’s technical prowess and financial wherewithal to bear on shale resources.
The FTC issued the investigative request to the companies on Monday. Pioneer said the companies are cooperating and still expect the deal to be completed in the first half of 2024.
The FTC during the Biden administration has taken a tough stance on mergers, although its court record is mixed, particularly when it tried to block large technology deals.
The commission under Chair Lina Khan has taken action in court to challenge 11 deals, including acquisitions by Meta Platforms and Microsoft. Nineteen firms have abandoned deals after coming under FTC investigation, including five that were called off after the FTC sued to block them.
Write to Dave Michaels at dave.michaels@wsj.com and Collin Eaton at collin.eaton@wsj.com
