Federal Trade Commission is investigating ExxonMobil’s $60B deal to acquire a Texas oil company
By MATTHEW DALY
Associated Press
WASHINGTON (AP) — Federal regulators are investigating ExxonMobil’s $60 billion deal to acquire a Texas oil company in what would be one the largest mergers in the energy industry in two decades, according to securities filings.
The Federal Trade Commission, which enforces federal antitrust law, has asked for additional information from the companies about Exxon’s proposed acquisition of Pioneer Natural Resources. The request is a step the agency takes when reviewing whether a merger could be anticompetitive under U.S. law. Pioneer disclosed the request in a filing Tuesday.
The investigation comes after Senate Majority Leader Chuck Schumer and 22 other Democratic senators urged the FTC to investigate the Exxon-Pioneer deal and a separate acquisition by oil giant Chevron, a proposed $53 billion purchase of Hess Corporation. Both deals are among the largest petroleum deals in U.S. history and could violate antitrust law, the Democrats said. There’s no public indication of a federal inquiry into the Chevron merger.
Schumer said Tuesday he asked the FTC 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. I’m glad the FTC is taking this step.”
The FTC, which shares antitrust authority with the Justice Department, can sue in court to block a merger or decline to take action, effectively clearing the deal. A spokesman for the commission declined to comment Tuesday.
Chevron, Exxon and other oil companies have announced huge profits from strong energy prices and demand since Russia’s invasion of Ukraine in February 2022. Exxon reported $9.1 billion in profits in the quarter that ended Sept. 30, while Chevron reported $6.5 billion in profits.
Exxon has said the proposed deal with Texas-based Pioneer Resources would enhance U.S. energy security and benefit the American economy and consumers.
Chevron said its proposed deal with New York-based Hess would strengthen long-term performance while “delivering higher returns and lower carbon” dioxide emissions that contribute to global warming.
Both deals must be approved by federal regulators.
Environmental groups have denounced what some called “merger mania” in the oil industry that threatens competition.
“Exxon publicly promised to reduce emissions, yet subsequently spent $60 billion acquiring another fossil fuel company – doubling down on their commitment to oil and gas and putting profits over people,” said Alex Witt of Climate Power, a left-leaning advocacy group founded by the Center for American Progress Action Fund, League of Conservation Voters and Sierra Club.
“The FTC is right to investigate Exxon’s acquisition of Pioneer, which could raise prices at the pump and is aimed at keeping the U.S. reliant on fossil fuels,” Witt said.
