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Exxon Mobil Corp Set to Close Pioneer Natural Resources Acquisition

HOUSTON (Reuters) – Exxon Mobil Corp is on track to finalize its $60 billion acquisition of Pioneer Natural Resources after reaching an agreement with antitrust regulators that includes keeping former Pioneer CEO Scott Sheffield off its board, as reported by the Wall Street Journal on Wednesday, citing sources familiar with the situation.

The Federal Trade Commission (FTC) is expected to make allegations against Sheffield, claiming he engaged in collusive activities with members of the Organization of the Petroleum Exporting Countries (OPEC) that may have had an impact on oil prices, according to the newspaper.

The FTC is reportedly asserting that Sheffield exchanged hundreds of messages with OPEC representatives, discussing various market dynamics such as pricing and production levels, the Journal mentioned in its report.

Sheffield officially retired as Pioneer’s CEO on December 31 but was still serving on its board, preparing to join Exxon’s board upon the completion of the acquisition agreement.

Both Pioneer and the FTC have declined to provide comments on the matter.

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“We are actively cooperating with the FTC throughout their extensive review process,” stated an Exxon spokesperson in response to the developments on Wednesday.

During a recent discussion on Exxon’s first-quarter earnings, company executives mentioned their cooperation with the FTC’s request for information and indicated no signs of antitrust concerns.

The FTC’s 30-day review is anticipated to conclude by the end of this week.

Exxon CEO Darren Woods affirmed last Friday that the company has submitted a vast amount of documentation, contracts, and production and sales data to the FTC, expressing confidence in the absence of antitrust issues.

Market analyst Bob Brackett from Bernstein investment firm mentioned that the FTC’s 30-day review period likely commenced in early April, foreseeing minimal barriers to a successful closure of the deal in the second quarter.

Despite the significant size of the proposed Exxon-Pioneer transaction, antitrust experts predicted in October that the FTC would face challenges in blocking the merger due to it involving producers rather than refiners or retail establishments.

The FTC, however, has intensified its scrutiny of oil and gas transactions, issuing a second information request to both Exxon and Pioneer last year. Additionally, the agency has sought supplementary details from Chevron, Diamondback Energy, Occidental Petroleum, and Chesapeake Energy regarding their respective acquisitions of competitors.

(Reporting by Sabrina Valle in Houston and Sourasis Bose in Bengaluru; Editing by Shailesh Kuber, Josie Kao, Marguerita Choy, and Leslie Adler)

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