ConocoPhillips Acquires Marathon Oil for 30 Trillion Won... Expanding the Size of U.S. Energy Company

US Oil Giant Mega Deals Continue
"Oil and Gas Demand Remains Strong for the Next Several Years"

American oil company ConocoPhillips has reached a sudden agreement to acquire Marathon Oil for $22.5 billion (approximately 30.8 trillion KRW). Amid the trend toward green transition, another 'mega deal' has emerged as major U.S. oil and gas giants like ExxonMobil and Chevron continue large-scale mergers and acquisitions (M&A) attempts, based on the outlook that demand for fossil fuels will persist.

On the 29th (local time), the two companies announced in a statement that ConocoPhillips will acquire all shares of Marathon Oil.

The equity value was evaluated at $17 billion (approximately 23.3 trillion KRW), which includes a 14.7% premium over Marathon Oil's closing price the previous day. ConocoPhillips also agreed to assume $5.4 billion (approximately 7.4 trillion KRW) in debt, recognizing Marathon Oil's enterprise value at a total of $22.5 billion.

Under this agreement, Marathon Oil shareholders will receive 0.255 shares of ConocoPhillips stock for each share they hold.

With the acquisition of Marathon Oil, ConocoPhillips will be able to expand its oil fields and business rights from Texas to North Dakota and Equatorial Guinea. The reserves are also expected to increase by 2 billion barrels.

The company stated that the deal will be completed in the fourth quarter. Dividends will be increased by 34% to $0.78 per share starting in the fourth quarter, and share repurchases are expected to reach $20 billion over the next three years.

Ryan Lance, CEO of ConocoPhillips, said, "This acquisition of Marathon Oil deepens our portfolio and adds high-quality, low-cost reserves, which also fits well with our financial structure. There are too many players in our industry, and consolidation is necessary. Scale and diversity are important."

This deal was finalized amid active M&A activities among oil giants. Previously, in October last year, ExxonMobil acquired Pioneer Natural Resources for $62 billion (approximately 84.9 trillion KRW), and Chevron also agreed to acquire Hess Corporation for $53 billion (approximately 72.6 trillion KRW) in the same month.

Bloomberg News evaluated, "Producers are betting on the outlook that oil and gas demand will remain robust for several years, leading to a series of large-scale deals as they seek new drilling locations."