ConocoPhillips to acquire Marathon Oil in $22.5B all-stock transaction

ConocoPhillips (COP) and Marathon Oil (MRO) announced that they have entered into a definitive agreement pursuant to which ConocoPhillips will acquire Marathon Oil in an all-stock transaction with an enterprise value of $22.5B, inclusive of $5.4B of net debt. Under the terms of the agreement, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, and a 16% premium to the prior 10-day volume-weighted average price. This acquisition is immediately accretive to ConocoPhillips on earnings, cash from operations, free cash flow and return of capital per share to shareholders. ConocoPhillips expects to achieve the full $500 million of cost and capital synergy run rate within the first full year following the closing of the transaction. The identified savings will come from reduced general and administrative costs, lower operating costs and improved capital efficiencies. This acquisition will add complementary acreage to ConocoPhillips’ existing U.S. onshore portfolio, adding over 2B barrels of resource with an estimated average point forward cost of supply of less than $30 per barrel WTI. The transaction is subject to the approval of Marathon Oil stockholders, regulatory clearance and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2024.