Marathon Oil has announced that it has received the necessary stockholder approval for its pending merger with ConocoPhillips.
Marathon Oil will file Form 8-K with the US Securities and Exchange Commission to report the voting results of the special stockholder meeting, the independent E&P company announced on Thursday.
The two US-based oil majors expect to finalise the transaction in the late fourth quarter of 2024 (Q4 2024), subject to regulatory clearance and other standard closing conditions.
In May, Conoco agreed to acquire Marathon Oil for $22.5bn, taking on $5.4bn in debt. ConocoPhillips would achieve at least $500m in cost and capital savings within the first full year following the deal's completion.
Regardless of the deal, ConocoPhillips foresees raising its regular base dividend by 34% to $0.78 per share in Q4 2024.
Based on recent commodity prices, after the deal is closed, Conoco expects share repurchases exceeding $20bn within the first three years, with more than $7bn in the initial full year.
However, according to several media reports, a Marathon Oil investor had sued earlier this month to block the merger, alleging that the proposed acquisition significantly undervalued the company.
Martin Siegel initiated this legal challenge in a New York state court on Monday. Siegel claimed that the proposed deal with ConocoPhillips could cost Marathon investors more than $6bn in value.
He also alleges that Marathon, its board members and its financial advisor, Morgan Stanley, misinterpreted the deal in a proxy statement, convincing shareholders to advocate for it.
According to the deal, Marathon Oil shareholders will be given 0.2550 shares of ConocoPhillips common stock for every common stock they own. This represents a 14.7% premium compared with Marathon Oil's closing share price on 28 May 2024, and a 16% premium compared with the average price over the prior ten days.
Marathon Oil 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.
The company states that this deal will increase ConocoPhillips’ current US holdings and bring in more than two billion barrels of highly compatible resources, with an anticipated average point forward cost of supply of under $30 per barrel West Texas Intermediate, a globally recognised benchmark crude.
