By Sabrina Valle and David French
HOUSTON/NEW YORK (Reuters) — Exxon Mobil Corp (NYSE:XOM)'s resurgence under CEO Darren Woods and the upcoming retirement of Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield were key to the oil major clinching the $60 billion acquisition, people familiar with the matter said.
After brief informal conversations earlier this year, Exxon approached Pioneer about a deal last month, the sources said. It was from a position of strength. Exxon's shares were hovering near record highs, and it had a cash pile of about $30 billion.
Sheffield said he was approached by Woods two weeks ago with an offer that was beneficial both to shareholders and Pioneer's employees. The Permian operations will be led by a mix of staff from both companies.
«Darren has been very fair in the negotiations,» Sheffield told a small group of reporters.
Woods had already capitalized on elevated energy prices to streamline Exxon's operations and focus on highly profitable oil and gas production.
This allowed Exxon to enter the deal negotiations with its stock coveted by investors as a valuable currency. The stakes were high. The acquisition would turn Exxon into the largest shale producer in the Permian basin, itself the biggest and most lucrative U.S. oilfield.
Pioneer agreed to an all-stock deal, even though Exxon could afford to pay all-cash through a combination of its cash on hand and borrowing, the sources said. The deal structure allowed the two companies to reconcile their price disagreements, according to the sources.
«We basically closed this deal fairly quickly,» Woods told reporters on a conference call on Wednesday.
Exxon could boast it clinched the agreement by paying a relatively small 16% premium to
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