June 11, 2024 | Energy | North America | Active

Marathon Oil / ConocoPhillips: Deal Insight

Continuing the wave of energy consolidation, on 29-May-24, ConocoPhillips, the largest independent oil producer in the US, agreed to acquire smaller rival Marathon Oil in an all-stock deal valued at $22.5bn, including debt. The merger ratio of 0.2550 ConocoPhillips shares for each Marathon share values the target at $30.33 per share, a 14.7% premium over the previous day’s closing. During the life of the transaction, Marathon will continue to pay its regular quarterly dividends, not exceeding $0.11 per share. ConocoPhillips will also maintain its quarterly cash dividends, including its variable return of cash. The companies have agreed to coordinate their quarterly dividend schedule to ensure that Marathon shareholders neither receive double dividends nor miss any dividend in any quarter. The deal is subject to approval from Marathon shareholders (50%), but a ConocoPhillips vote is not needed. The deal is also subject to regulatory approvals, including HSR, which is expected to be notified within 10 business days (by 11-Jun-24). A standard burdensome clause restricts the companies from making any divestments that would “reasonably be expected to have… a material adverse effect on the business, financial condition or operations of parent [ConocoPhillips] taken as a whole.” The merger agreement also contains ...

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