ConocoPhillips to Acquire Marathon Oil in $22.5 Billion Deal

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ConocoPhillips agreed on Wednesday to acquire its smaller rival, Marathon Oil, the latest deal in a wave of consolidation sweeping the oil industry.

The all-stock deal values Marathon at $22.5 billion, including debt. The acquisition “further deepens our portfolio and fits within our financial framework, adding high-quality, low cost-of-supply inventory,” Ryan Lance, Conoco’s chief executive, said in a statement.

Marathon’s operations are in some of the most sought-after oil fields in New Mexico, North Dakota and Texas; it also drills offshore of Equatorial Guinea.

Major oil companies have pulled off some of the biggest acquisitions of the past year despite regulatory scrutiny from the Biden administration and volatility in the oil market. The U.S. giants have been harnessing record profits, giving them the firepower to acquire smaller players with operations in oil-rich regions like the Permian Basin, Bakken Shale and in the Gulf of Mexico.

There was $250 billion in deal-making activity in the oil and gas industry last year, according to Reuters, including Exxon Mobil’s $60 billion acquisition of Pioneer Natural Resources and Chevron’s $53 billion takeover of Hess, which was approved by Hess’s shareholders on Tuesday.

Conoco was in the running to buy Endeavor Energy Resources earlier this year, but lost out to Diamondback Energy, which announced an agreement in February to buy the company for $26 billion.

Conoco’s agreement with Marathon is subject to regulatory clearance and a vote by shareholders. The companies said they expected to close the deal in the fourth quarter.