Shareholders in Marathon Oil have approved a ~$16 billion acquisition by ConocoPhillips, Marathon Oil said in a Thursday statement, with the deal expected to close in the fourth-quarter of this year, pending a Federal Trade Commission review, Reuters reports.
Conoco and Marathon Oil struck their acquisition deal in May when Conoco agreed to take over the target company in a deal worth $22.5 billion, including the assumption of $5.4 billion in debt.
Earlier this month, a Marathon Oil shareholder filed a lawsuit seeking to stop the ConocoPhillips acquisition, claiming that the price undervalued the company. Investor Martin Siegel alleged in his filing that the acquisition could deprive Marathon Oil shareholders of some $6 billion in company value. Siegel also accused the company's management and its adviser Morgan Stanley of misrepresenting the deal with Conoco to shareholders when it sought their backing for the move.
For Conoco, the deal would push its market value to over $150 billion, extending its lead as the largest independent producer, on the same level as the supermajors, though slightly ahead of BP and slightly behind Shell, according to analysis from Enervus Intelligence Research.
ConocoPhillips "is leveraging its premium market valuation, which it shares with the majors, to strike a deal that will immediately boost its free cash flow profile and enhance its capital return program for investors," Andrew Dittmar, a Director on the Enervus Intelligence team, said in a statement at the time.
Conoco's chief executive, Ryan Lance, said at the time of the deal's origins that "there are too many players. Scale matters, diversity matters, and we are going through a natural cycle of that in the business".
In mid-July, Conoco received its second request for more information from the FTC for the megadeal.
By Charles Kennedy for Oilprice.com
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