This transaction will merge two of my holdings and remove PXD from my High Yield Portfolio. I’ll have to find a replacement that pays almost an almost 7% dividend yield.
The deal, at $253 a share, values Pioneer at an almost 7% premium to its closing value of about $55.4 billion Tuesday. It cements Exxon’s status as the dominant player in the American fracking industry, now centered in West Texas, where Pioneer has more places to drill than almost all of its rivals.
Shares in Pioneer rose about 3% in premarket trading on Wednesday. Exxon’s stock dropped less than 1%.
The deal is Exxon’s largest since its $75 billion merger with Mobil in the late 1990s and is the biggest corporate transaction so far this year. The Wall Street Journal reported last week that Exxon and Pioneer were closing in on the tie-up.
The deal represents a premium of nearly 18% to Pioneer’s share price on the day of the Journal article.Exxon to Buy Pioneer in $60 Billion Deal to Create Shale Giant – WSJ (no paywall)