Biden admin launches investigation into ExxonMobil’s $60 billion merger deal

The Biden administration recently launched an investigation into ExxonMobil’s $60 billion merger deal with a Texas oil company, the Associated Press reported Tuesday.

In October, ExxonMobil announced plans to merge with Pioneer Natural Resources in an all-stock transaction. The pending deal will more than double the company’s Permian footprint, it noted.

“The merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating the industry’s leading high-quality undeveloped U.S. unconventional inventory position,” an ExxonMobil press release stated. “Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian.”

The company believes the deal will provide the United States with greater energy security.

ExxonMobil Chairman and CEO Darren Woods stated, “Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. 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 standalone basis.”

“Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production. As importantly, as we look to combine our companies, we bring together environmental best-practices that will lower our environmental footprint and plan to accelerate Pioneer’s net-zero plan from 2050 to 2035,” Woods added.

Last month, Senate Majority Leader Chuck Schumer (D-N.Y.) and 22 other senators sent a letter to the Federal Trade Commission urging an investigation into the pending deal. According to the Democratic lawmakers, the merger could cause gas prices to increase.

“These deals are likely to harm competition, risking increased consumer prices and reduced output throughout the United States,” the senators told the FTC.

ExxonMobil addressed critics’ concerns regarding competition.

“For all those concerned about competition, the fact that the two companies combined represent about 5% of U.S. oil production should set their mind at ease. For all those who seek even greater U.S. energy independence and far lower emissions, this merger represents nothing but upside for our economy and our environment,” ExxonMobil said in a statement.

For the deal to close, it must be approved by federal regulators.

Earlier this week, securities filings revealed that the FTC opened a probe into the merger over potential antitrust violations.

Schumer encouraged the agency to “take a hard look at Exxon’s blockbuster merger and block it if it would lead to higher prices, hurt competition or force families to pay more at the pump.”

He noted that he is “glad the FTC is taking this step.”

Woods stated that he is not concerned about the FTC’s investigation.

“I don’t think there’s any angle that you can look at this potential combination and find any concerns about competition,” he told CNBC.

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