Data from a Law360 analysis of Dealogic figures shows that the oil and gas sector ranked third globally in total deal value announced through June, surpassed only by the technology and healthcare sectors. The sector accounted for 7.9% of total deal values during the first half of the year, a significant increase from the 5.5% and 3% shares in the latter and first halves of 2022, respectively.
Major Deals and Increased Regulatory Scrutiny
The ConocoPhillips and Marathon Oil agreement, valued at $22.5 billion and inclusive of $5.4 billion in debt, is one of the largest deals in the recent consolidation wave. Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock.
This deal is among several large transactions, such as Exxon’s $60 billion purchase of Pioneer Natural Resources announced in October, which has attracted considerable scrutiny from lawmakers and regulators. The FTC has also issued second requests for other major deals, including Chevron’s attempt to acquire Hess, Diamondback Energy’s $26 billion deal with Endeavor Energy Resources, and Chesapeake Energy’s planned $7.4 billion merger with Southwestern Energy.
Increased Investigations Under the Biden Administration
Larger transactions have faced heightened scrutiny under the Biden administration. Deals valued at over $1 billion are three times more likely to be investigated and six times more likely to receive a second request from the FTC or the Department of Justice compared to those valued below $300 million, according to a Morgan Lewis & Bockius LLP report based on 2022 fiscal year data.
