US Trade Regulator Slows Down ConocoPhillips’ Takeover of Competitor Marathon
ConocoPhillips said it has received a second request from the US Federal Trade Commission (FTC) for information about its proposed acquisition of rival Marathon Oil.
Both companies received requests on July 11 and are working with the FTC to review the merger.
In May, Conoco said it would pay $22.5 billion to buy Marathon Oil to boost production and achieve greater economies of scale in U.S. shale and LNG production. The two companies have operations in West Texas, South Texas and North Dakota.
Requesting additional information will likely slow down the closing of the deal. In May, ConocoPhillips said it conservatively estimated the deal would close in the fourth quarter of this year, delaying the full realization of expected cost savings and benefits from sharing equipment and personnel. The company confirmed the timing on Friday.
The combination of Conoco and Marathon will create a company that produces 2.26 million barrels of oil and gas per day and will add 1.32 billion barrels of proven reserves to ConocoPhillips’ 6.8 billion, Reuters writes.
The offer of 0.255 ConocoPhillips shares for each Marathon share represented a premium of 14.7% to the company’s pre-closing price.
