Analysis-US would struggle to block Exxon's politically unpopular megadeal
By Diane Bartz and David French
(Reuters) — The White House may have blamed Exxon Mobil (NYSE:XOM) for high energy prices taking their toll on consumers, but would struggle to thwart the top U.S. oil producer's contemplated $60 billion acquisition of Pioneer Natural Resources (NYSE:PXD), five antitrust lawyers and experts said on Friday.
Deal negotiations between Exxon and Pioneer are advanced but have not yet led to an agreement, Reuters reported on Thursday. The acquisition would give Exxon ownership of the largest producer in the biggest U.S. oilfield.
U.S. President Joe Biden has blasted energy companies for their surging profits as gasoline prices soared at the pump, and his administration has been especially critical of Exxon for not raising production despite its record earnings.
The White House wrote to Federal Trade Commission (FTC) chair Lina Khan in 2021 asking her to scrutinize deals in the sector for «anti-consumer behavior,» and the antitrust regulator subsequently slowed down the approval of many of them as it reviewed them.
These transactions were eventually allowed to be completed, and the regulator has not sued to thwart an oil and gas production deal since 2000.
The lawyers and experts interviewed said the FTC would face an uphill struggle in challenging Exxon's attempted acquisition of Pioneer.
This is because oil and gas companies have been effective in arguing that U.S. mergers alone cannot stifle competition, as commodity prices are dictated by supply and demand forces in a vast global market.
Andre Barlow, an antitrust attorney with Doyle, Barlow and Mazard PLLC, said oil and gas deals such as that for Pioneer, which involve production and exploration, are easier to defend under antitrust law.
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