Senate Majority Leader Chuck Schumer, along with 22 other Democratic senators including Sen. Amy Klobuchar, chair of the Judiciary Committee's antitrust panel, and Sens. Elizabeth Warren and Bernie Sanders, have urged federal regulators to investigate ExxonMobil (NYSE:XOM)'s proposed $60 billion acquisition of Texas-based Pioneer Natural Resources (NYSE:PXD) and Chevron (NYSE:CVX)'s planned $53 billion purchase of Hess Corp (NYSE:HES). The senators argue that these deals, which rank among the largest in U.S. petroleum history, could potentially violate antitrust laws.
The senators' concerns include possible increases in gas prices, damage to competition, a rise in consumer prices, a decrease in nationwide output, impacts on small operators, and lower wages. These potential issues are seen as significant enough to warrant an investigation by the Federal Trade Commission (FTC), despite counterarguments suggesting that the vast global oil and gas market would prevent dominant firms like Exxon or Chevron from restricting global capacity.
Moreover, the geopolitical backdrop of Russia's invasion of Ukraine and the substantial profits recently reported by Exxon ($9.1 billion) and Chevron ($6.5 billion) due to strong energy prices and demand since the invasion add further layers to the situation.
In response to these concerns, Exxon has defended their proposed merger with Pioneer Natural Resources by stating that it would enhance U.S. energy security, benefit the economy, and lower emissions given their combined 5% of U.S. oil production. However, the FTC has yet to comment on this matter or on Chevron's intended acquisition of Hess Corp.
This development underscores the increased scrutiny facing large-scale mergers and acquisitions in the U.S., particularly within industries that have direct impacts on consumer prices and national economic performance.
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