Marathon Oil shareholders have approved ConocoPhillips’ acquisition of the company in a deal valued at approximately $16 billion, Marathon Oil announced in a statement on Thursday. The transaction is expected to be finalized in the fourth quarter of this year, subject to approval by the Federal Trade Commission (FTC).
Details of the Acquisition
The acquisition agreement, initially reached in May, sees ConocoPhillips acquiring Marathon Oil for a total of $22.5 billion. This figure includes the assumption of $5.4 billion in Marathon Oil’s debt.
Legal Challenges and Allegations
In a recent development, Marathon Oil faced a legal challenge when shareholder Martin Siegel filed a lawsuit aimed at blocking the acquisition. Siegel contends that the agreed purchase price undervalues Marathon Oil, potentially depriving its shareholders of approximately $6 billion in company value. He also alleges that Marathon Oil’s management and its financial adviser, Morgan Stanley, misrepresented the deal to shareholders during the approval process.
Impact on ConocoPhillips
Upon completion of the acquisition, ConocoPhillips’ market value is projected to exceed $150 billion. This would solidify its position as the leading independent oil producer, placing it in a competitive range comparable to the major oil companies, slightly ahead of BP and just behind Shell.
Andrew Dittmar, a Director at Enervus Intelligence, commented that ConocoPhillips is capitalizing on its premium market valuation to secure a deal that will significantly enhance its free cash flow and strengthen its capital return program for investors.
Statements from ConocoPhillips
Ryan Lance, CEO of ConocoPhillips, highlighted the strategic importance of the acquisition when the deal was first announced. He noted that the industry is undergoing a consolidation phase, with scale and diversity becoming increasingly important.
Regulatory Review
In July, ConocoPhillips received a second request for additional information from the FTC regarding the acquisition, a standard step in regulatory reviews for significant deals.
The outcome of the FTC’s review will be crucial for finalizing the acquisition, with both companies awaiting further regulatory approvals to move forward with the transaction.
Related topic:
