Energy
ExxonMobil & XTO: Big Oil Gets Even Larger (XOM, XTO)
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Big oil is about to get even larger. Exxon Mobil Corporation (NYSE: XOM) and XTO Energy Inc. (NYSE: XTO) announced an all-stock merger transaction valued at $41 billion. This merger, or acquisition, is meant to enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources.
ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. The deal has already been approved by the boards of directors of both companies. The agreement is subject to XTO stockholder approval and is also subject to regulatory approval.
Exxon is sitting on top of a mountain of cash as is, and this is an all stock deal. It will be interesting to see how regulators treat this under the Obama administration, because this is the largest oil company making a large deal to become even larger.
Jon C. Ogg
December 14, 2009
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