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ExxonMobil (XOM) Expects Q2 Closure for $59.5B Pioneer Deal

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Exxon Mobil Corporation (XOM - Free Report) reiterates its commitment to closing the planned $59.5 billion acquisition of Pioneer Natural Resources (PXD - Free Report) in the second quarter of this year. The announcement was made by ExxonMobil's senior vice president, Neil Chapman, during a conference hosted by Morgan Stanley on Wednesday.

Navigating Regulatory Pathways

ExxonMobil remains on track with its proposed acquisition of Pioneer Natural Resources, aiming to close the deal in the second quarter of 2024, as reaffirmed by Chapman. The regulatory process involves addressing the Federal Trade Commission's (FTC) second request, requiring XOM to submit extensive information, comprising millions of pages, for review.

Chapman assured stakeholders that despite the ongoing regulatory scrutiny, the company maintains confidence in the estimated second-quarter timeline for finalizing the transaction. The meticulous sorting of information in response to FTC's second request is a crucial step in ensuring regulatory compliance.

Dealreporter Insights

Chapman’s comments followed a recent report by Dealreporter, which suggested that ExxonMobil is likely to certify with FTC's second request by the middle of March. This aligns with Chapman's recent statements, providing additional insights into the progress of the acquisition process.

Acquisition Background

The acquisition deal, announced in October, involves ExxonMobil acquiring Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, equivalent to $253 per share. ExxonMobil CEO Darren Woods expressed confidence at the time, stating that regulatory obstacles were not anticipated.

The oil giant's acquisition of Pioneer Natural Resources is part of a strategic move to strengthen its position in the energy sector. ExxonMobil aims to leverage the combined resources of both companies to enhance its portfolio and navigate the evolving landscape of the global energy market.

Zacks Rank & Key Picks

ExxonMobil currently carries a Zack Rank #3 (Hold).

A couple of better-ranked stocks in the energy sector are Sunoco LP (SUN - Free Report) and Murphy USA Inc. (MUSA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow. 

The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $4.89. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.

The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

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