According to The Wall Street Journal, the regulatory body has requested additional information from both Exxon Mobil and Pioneer as part of its standard procedure to assess the potential anticompetitive implications of the merger under U.S. law. Pioneer Natural Resources disclosed this development in a filing on Tuesday, shedding light on the ongoing scrutiny of the landmark deal.
Merger investigations of this magnitude typically take around 10 months to complete, as indicated by data compiled by law firm Dechert. The FTC, in conjunction with the Justice Department, holds the authority to either file a lawsuit to block the merger or give its clearance, effectively allowing the deal to proceed. In some instances, companies opt to cancel proposed mergers when they become aware of impending antitrust actions.
Exxon Mobil’s October proposal to acquire Pioneer in an all-stock deal worth $59.5 billion aims to position Exxon as the leading oil producer in the Permian Basin, encompassing West Texas and New Mexico, which is currently the most active U.S. oil field. If successful, this would mark Exxon’s largest deal since its $75 billion merger with Mobil in the late 1990s.
Related: The Case for an Exxon-Chevron Merger
The oil and gas industry has recently witnessed a series of high-profile acquisitions, prompting speculation about potential antitrust scrutiny from federal regulators. Chevron, in response to Exxon’s move, announced a $53 billion all-stock deal to acquire Hess two weeks later. Additionally, Occidental Petroleum is reportedly in talks to purchase CrownRock, a prominent private oil company in the Permian, for over $10 billion, according to recent reports from The Wall Street Journal.
Despite industry expectations, antitrust regulators have historically been hesitant to intervene in oil producer deals, often adopting a global perspective on the competitive landscape of their products. Investors, anticipating continued consolidation in the sector, are closely watching these developments, with the Permian Basin becoming a focal point for major players seeking to expand their portfolios. As top-tier drilling opportunities become scarcer in the region, selling valuable land has proven to be a more lucrative strategy for executives compared to drilling operations. The outcome of the FTC investigation could have far-reaching implications for the future structure of the oil and gas market.
Source: WSJ
Featured News
Google and South Carolina Clash Over State Records Demand
May 8, 2024 by
CPI
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI