ExxonMobil agreed to buy Pioneer Natural Resources for $US59.5 billion in the world’s largest takeover announced this year, doubling down on fossil fuel production even as many global policymakers grow increasingly concerned about climate change and the oil industry’s reluctance to shift to cleaner energy.
“The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a stand-alone basis,” said Darren Woods, Exxon’s CEO. The Pioneer deal is a sign that it is now easier to acquire an oil producer than to drill for oil in a new location.
Exxon has been careful in recent years to invest modestly in new production as it raised its dividends and bought back more of its own stock. Buying Pioneer would add production, a big change in its strategy. “While the company has a solid succession plan in place, oil and gas markets have been volatile and the capital available to traditional oil and gas companies in the US has been limited,” said Peter McNally, an analyst at Third Bridge, a research and analytics firm.
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