Exxon Mobil Corp (NYSE:XOM)., a global leader in the oil and gas industry, is reportedly on the brink of acquiring Pioneer Natural Resources (NYSE:PXD) Co., an independent shale explorer with significant holdings in the Permian Basin oil field. The deal, which is said to be worth approximately $60 billion, is expected to be finalized in the coming days barring unforeseen complications.
This acquisition would mark Exxon's most significant strategic move since its historic takeover of Mobil Corp. in 1999.
The acquisition of Pioneer Natural Resources follows initial discussions that took place in April. These talks had a notable impact on Pioneer's stock, causing a 4.5% increase on April 10. As of Friday, Pioneer boasts a market capitalization of $50.12 billion, according to InvestingPro data.
InvestingPro Tips for Pioneer highlight that the company has been profitable over the last twelve months and analysts predict it will continue to be profitable this year. The company operates with a moderate level of debt and has consistently raised its dividend for 5 consecutive years, which is a significant return to shareholders. Pioneer's strong financial performance is further supported by its high return on assets and the fact that its cash flows can sufficiently cover interest payments.
The potential deal emerges amidst recent fluctuations in both companies' stocks and a downturn in U.S. crude oil prices. The Wall Street Journal also noted the market's anticipation for the upcoming monthly employment report from the government, which could further influence investor sentiment.
The acquisition would solidify Exxon's control over the Permian Basin oil field through Pioneer's dominance, strengthening its position in one of the most productive oil fields in the United States. This development comes at a crucial time for Exxon Mobil as it navigates shifts in the energy market and seeks to bolster its portfolio amid lower crude oil prices.
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