Exxon Mobil, the energy giant, has made a significant move in the industry with its nearly $60 billion agreement to acquire Pioneer Natural Resources. This deal marks the largest oil-and-gas transaction in the past two decades and solidifies Exxon’s position as the dominant player in the American fracking industry. Pioneer, located in West Texas, provides Exxon with valuable drilling opportunities that surpass those of its competitors.
The agreement values Pioneer at a premium of almost 7%, offering $253 per share compared to its closing value of approximately $55.4 billion on Tuesday. This acquisition is Exxon’s largest since its $75 billion merger in the late 1990s, making it the biggest corporate transaction of the year. The Wall Street Journal recently reported that Exxon and Pioneer were heading towards a partnership, which has now come to fruition.
Pioneer’s shares have already seen a positive impact from this deal, with a 3% increase in premarket trading on Wednesday. On the other hand, Exxon’s stock experienced a slight drop of less than 1%. Despite this, Exxon has been able to leverage its higher share price relative to peers in the past year, attracting institutional investment firms and allowing its stock to outperform most other oil companies.
Exxon Mobil’s future now seems strongly tied to fossil fuels for the foreseeable future, as this major acquisition places them at the forefront of the industry.