The US Federal Trade Commission Approves Exxon Mobil’s $60 Billion Acquisition of Pioneer Natural Resources, Bars Co-Founder from Board
In a landmark decision, the US Federal Trade Commission (FTC) has given the green light to Exxon Mobil Corp.’s $60 billion purchase of Pioneer Natural Resources Co. However, the agency has imposed a restriction on Scott Sheffield, the co-founder of Pioneer, prohibiting him from taking a seat on Exxon’s board.
The FTC’s decision comes after evidence surfaced of Sheffield engaging in potential collusive activity by communicating with OPEC and US peers regarding oil pricing and output. The agency’s order is aimed at preventing Sheffield from manipulating crude prices and causing US consumers to pay higher fuel prices.
Following the announcement, Exxon shares rose by 0.4%, while Pioneer shares saw a 1.1% increase. Exxon has agreed to the terms of the consent decree and is set to close the acquisition on May 3.
Despite expressing surprise at the FTC’s allegations and disagreement with the agency’s conclusions, Pioneer has chosen not to take any steps to prevent the merger from closing. Sheffield, who was known for advocating capital discipline and reducing flaring in the shale industry, has been accused of acting as a “conduit” between US shale and OPEC in an attempt to coordinate activities between the two.
In response to the FTC’s claims, Pioneer and Sheffield have defended their actions, stating that his efforts were aimed at pushing back against the “predatory practices” of OPEC and Russia. This decision by the FTC marks a significant moment in the ongoing scrutiny of oil and gas mega-mergers by US regulatory agencies.
The acquisition will undoubtedly have far-reaching implications for the industry, as companies navigate the complex landscape of global oil markets amidst increasing regulatory oversight.
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