American petroleum company Marathon Oil has secured the necessary stockholder approval for its previously announced $22.5bn merger with rival energy firm ConocoPhillips.
According to Marathon Oil, the vote results of the special stockholder meeting will be filled in a Form 8-K with the US Securities and Exchange Commission (SEC).
The company and ConocoPhillips continue to expect the transaction to close late in Q4 2024, pending regulatory approvals and other standard closing conditions.
Marathon Oil’s shareholder approval comes despite legal action from shareholder Martin Siegel, who filed a lawsuit earlier this month seeking to block the merger.
Siegel argues that the deal significantly undervalues Marathon Oil and could lead to a loss exceeding $6bn for investors.
Additionally, he claims that Marathon Oil, its board of directors, and its financial adviser, Morgan Stanley, have provided misleading information in a proxy statement intended to persuade shareholders to approve the merger, as reported by Bloomberg.
The merger, announced in late May 2024, is structured as an all-stock transaction. It includes the assumption of $5.4bn in net debt.
Marathon Oil, listed on the New York Stock Exchange (NYSE), operates in several key regions including the Eagle Ford in Texas, Bakken in North Dakota, Permian in New Mexico and Texas, and STACK and SCOOP in Oklahoma. The company also has a gas business in Equatorial Guinea.
ConocoPhillips, also listed on the NYSE, had operations in 13 countries as of 31 March 2024, with assets totalling $95 billion and a workforce of nearly 10,000 employees.
The company expects the acquisition to enhance its earnings, cash flow from operations, free cash flow, and capital return per share immediately.
ConocoPhillips anticipates realising $500 million in synergies from cost and capital efficiencies within the first year following the merger’s completion.
The acquisition is projected to strengthen ConocoPhillips’ US onshore portfolio by integrating additional acreage, which includes over two billion barrels of resources at an estimated average supply cost below $30 per barrel of West Texas Intermediate (WTI).
Under the terms of the merger agreement, Marathon Oil shareholders will receive 0.255 shares of ConocoPhillips common stock for each Marathon Oil share. This exchange represents a 14.7% premium over Marathon Oil’s closing share price on 28 May 2024 and a 16% premium over the average price of the previous 10 days.
