ConocoPhillips has announced its plans to acquire Marathon Oil in an all-stock transaction valued at $17.1 billion. The deal, including debt, is valued at $22.5 billion. This acquisition comes as energy prices rise and big oil companies generate significant profits. Crude prices have increased by over 12% this year, with the cost of a barrel surpassing $80. Chevron's $53 billion acquisition of Hess and Exxon Mobil's proposed acquisitions of Denbury Resources and Pioneer Natural Resources are examples of other recent mergers in the energy sector [802a09b0].
The acquisition of Marathon Oil will strengthen ConocoPhillips' Lower 48 portfolio by adding over 2 billion barrels of resources with a forward cost of supply estimated at less than $30 per barrel WTI. The deal is expected to generate at least $500 million in annual cost and capital savings within the first year post-closing [6173c9ca].
However, critics of the deal have raised concerns about further consolidation of power in the oil industry and potential delays in the transition to clean energy. The acquisition may also face antitrust issues and scrutiny from the Federal Trade Commission [6173c9ca].
The ConocoPhillips-Marathon Oil deal is expected to close in the fourth quarter, pending approval from Marathon Oil stockholders [802a09b0].
This acquisition marks a significant development for ConocoPhillips as it seeks to strengthen its position in the U.S. shale market and capitalize on the potential synergies between the two companies. It remains to be seen how this acquisition will impact ConocoPhillips' stock value and overall performance in the coming months and years [d8a059fa].
In related news, Connectus Wealth LLC has reduced its holdings in Marathon Petroleum Co. by 9.4% in the fourth quarter, selling 8,287 shares. The institutional investor now owns 79,649 shares of the oil and gas company's stock, valued at $11,837,000. Other large investors have also modified their holdings of Marathon Petroleum [5d23786a].
Marathon Petroleum reported earnings of $2.78 per share for the quarter, beating analysts' estimates of $2.53 per share. The company's board has approved a stock repurchase plan of $5.00 billion. Marathon Petroleum will pay a quarterly dividend of $0.825 per share on June 10th, with a yield of 1.88%. Several equities analysts have given Marathon Petroleum a 'Moderate Buy' rating, with an average price target of $193.92 [5d23786a].
Marathon Petroleum is an oil and gas company listed on the NYSE under the ticker symbol MPC. The stock is currently trading at $175.10, with a 52-week low of $108.88 and a 52-week high of $221.11 [5d23786a].