Marathon Oil shareholders approve Megadeal Conoco acquisition

Marathon Oil shareholders have approved a roughly $16 billion acquisition by ConocoPhillips, Marathon Oil said in a statement Thursday, with the deal expected to close in the fourth quarter of this year, pending a review by the Federal Commerce, reports Reuters.

Conoco and Marathon Oil hit them purchase agreement in May when Conoco agreed to take over the target company in a business worth $22.5 billion, including the assumption of $5.4 billion in debt.

Earlier this month, a Marathon Oil shareholder filed a lawsuit to stop the ConocoPhillips acquisition, claiming the price undervalued the company. Investor Martin Siegel argued in his filing that the acquisition could deprive Marathon Oil shareholders of about $6 billion in company value. Siegel also accused the company’s management and its adviser, Morgan Stanley, of misrepresenting the Conoco deal to shareholders when he sought their support for the move.

For Conoco, the deal would push its market value to over 150 billion dollarsextending its lead as the biggest independent producer, on par with 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 close a deal that will immediately improve its free cash flow profile and enhance its capital return program for investors,” Andrew Dittmar , director of the Enervus Intelligence team, said in a statement at the time.

Conoco Chief Executive Ryan Lance said at the time of the deal’s origination that “there are too many players. Scale matters, diversity matters and we are going through a natural cycle of this in business”.

In mid-July, Conoco received a second request for more information from the FTC about the megadeal.

By Charles Kennedy for Oilprice.com

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