Exxon and Chevron Make All-Stock Deals to Acquire Shale Players Amid Energy Price Volatility
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Exxon and Chevron are using all-stock deals to acquire targets like Pioneer and Hess amid volatile energy prices. Stock allows targets to benefit from combined upside.
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Target CEOs and shareholders wanted to avoid locking in a deal price in cash in case energy prices rise further. Stock deals let them maintain exposure.
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Exxon and Chevron aim to avoid exploration risk and want skills/assets of targets like in Permian Basin and Guyana.
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Premiums paid were small at 18% for Exxon/Pioneer and 4.9% for Chevron/Hess due to already high target valuations.
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Exxon and Chevron's excess cash can fund dividends and buybacks to limit dilution, indirectly supporting all-stock deals.