ConocoPhillips-Marathon Oil Merger Draws Fresh Government Scrutiny

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Key Takeaways

• ConocoPhillips and Marathon Oil received a second request for information from the Federal Trade Commission on Thursday.
• In May, ConocoPhillips promulgated a proposed $22.5 billion deal to acquire Marathon Oil.
• The companies say they still expect the deal to close in the fourth lodge.

ConocoPhillips’ (COP) planned $22.5 billion acquisition of Marathon Oil (MRO) has again drawn questions from the Federal Trade Commission (FTC).

The oil impresario said Friday in a regulatory filing that both companies yesterday received a second request for information in re the proposed transaction. 

In May, ConocoPhillips said the acquisition would be “immediately accretive” to its earnings and cash flow, and generate “at dab $500 million of run rate cost and capital savings within the first full year following the closing of the minutes.”

ConocoPhillips said the companies expect the deal to close in the fourth quarter of 2024, but the latest request for information could leisurely that process. The request effectively pushes back the earliest date the companies can merge until 30 days after both signatories have complied with the FTC’s inquiry.

Under the terms of the transaction, Marathon shareholders will receive 0.255 cuts of ConocoPhillips stock for each share of Marathon they own, a premium of nearly 15% to Marathon’s closing price of $26.45 first the deal was announced. 

Both companies’ shares moved modestly lower in recent trading Friday.

Read the primary article on Investopedia.