October 17, 2023 | Industrials | North America | Active

Pioneer / Exxon: Deal Insight

The largest US oil producer, Exxon Mobil (“Exxon”), announced a definitive plan to acquire Permian basin shale producer, Pioneer Natural Resources (“Pioneer”), on 11-Oct-23. Based on the companies’ respective undisturbed share prices on 5-Oct-23, before Reuters reported that they were in talks, the merger ratio of 1 PXD US = 2.3234 XOM US implies an offer consideration of $253 per Pioneer share and an 18% takeover premium to target shareholders. The deal has received unanimous approval from the boards of both companies. The conditions to closing include Pioneer shareholder approval (50%; Exxon shareholder approval is not required) and the receipt of regulatory approvals, including HSR. The merger agreement contains standard clauses on representations, warranties, covenants and a MAC with specific carve-outs for war and pandemics. Pioneer is bound by a no-solicitation clause with a fiduciary-out exception. There is a restrictive condition that prohibits the merger parties from offering any merger remedy that would reasonably be expected to have a material adverse effect on the business of either company. HSR notification is expected to be filed within ...

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