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ConocoPhillips to acquire Marathon Oil in $22.5 billion all-stock deal

ConocoPhillips and Marathon Oil said in a joint statement Wednesday that Conoco will buy Marathon in a $22.5 billion all-stock transaction. It is subject to regulatory approval and the approval of Marathon Oil shareholders. Photo courtesy ConocoPhillips
ConocoPhillips and Marathon Oil said in a joint statement Wednesday that Conoco will buy Marathon in a $22.5 billion all-stock transaction. It is subject to regulatory approval and the approval of Marathon Oil shareholders. Photo courtesy ConocoPhillips

May 29 (UPI) -- ConocoPhillips announced Wednesday it had entered a deal to acquire Marathon Oil.

The all-stock transaction is valued at $22.5 billion, including $5.4 billion in net debt, ConocoPhillips said in a statement.

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"This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position," said ConocoPhillips CEO Ryan Lance.

Marathon Oil CEO Lee Tillman said that when combined with ConocoPhillips he was "confident our assets and people will deliver significant shareholder value over the long term."

He added that ConocoPhillips is the right home to build on Marathon's legacy.

"With its premier global asset base, strong balance sheet and laser focus on operational excellence, ConocoPhillips' track record of long-term investments, differentiated shareholder distributions and active portfolio management are unmatched," Tillman said.

Lance added that the deal creates "long-term value for our shareholders."

The companies said in a joint statement that ConocoPhillips expects to realize at least $500 million of run-rate cost and capital savings within the first full year of the transaction closing.

ConocoPhillips expects stock buybacks of more than $20 billion dollars in the first three years after the acquisition, with more than $7 billion in buybacks in the first full year after the acquisition.

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The company will also increase its dividend by 34% to 78 cents per share, beginning in the fourth quarter of 2024.

The deal must be approved by Marathon Oil stockholders and meet the requirements of regulatory approval before closing.

The companies said they expect the deal to go through in the fourth quarter of 2024.

Marathon Oil shareholders will get 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock.

According to the companies that will amount to a 14.7% premium on the Tuesday Marathon Oil closing share price and a 16% premium to the prior 10-day weighted volume average price.

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