ConocoPhillips (COP) and Marathon Oil (MRO) have finalized a definitive agreement under which ConocoPhillips will acquire Marathon Oil through an all-stock transaction valued at $22.5 billion, which includes $5.4 billion in net debt. Shareholders of Marathon Oil will receive 0.2550 shares of ConocoPhillips common stock for each share they hold of Marathon Oil.
This acquisition is expected to be immediately beneficial for ConocoPhillips in terms of earnings, cash from operations, free cash flow, and return of capital per share to its shareholders. ConocoPhillips anticipates realizing the full $500 million in cost and capital synergies within the first year following the transaction’s closing. The deal is anticipated to be finalized in the fourth quarter of 2024.
Furthermore, ConocoPhillips has announced plans to increase its regular base dividend by 34% to 78 cents per share starting in the fourth quarter of 2024. Upon closing, the company intends to repurchase over $7 billion in shares during the first full year, a significant increase from the over $5 billion planned independently. Additionally, ConocoPhillips aims to repurchase over $20 billion in shares within the first three years post-transaction closure.
