Pioneer Natural And Exxon Mobil: The Benefits Of An All-Stock Deal

Summary:

  • Exxon Mobil Corporation is set to acquire shale driller Pioneer Natural Resources Company in an all-stock deal, valuing Pioneer stock at $253 per share.
  • I explain why I’m a big fan of the transaction, even though I bought Pioneer not too long ago with the intention of holding it long term.
  • Those who bought Pioneer in 2020 or not too long ago become shareholders of Exxon at a pretty significant discount given the favorable Pioneer/Exxon spread at the respective time.
  • Structuring the transaction as an all-stock deal is a good idea not only from a tax perspective, but also from the standpoint of efficient use of capital.

Oil pumps working under the sunrise sky

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Introduction

My history with shale driller Pioneer Natural Resources Company (NYSE:PXD) was a very short one. As I reported in this article from early July 2023, I sold my sizable position in 3M Company (


Analyst’s Disclosure: I/we have a beneficial long position in the shares of PXD, EOG, CVX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The contents of this article, my previous articles, and my comments are for informational purposes only and may not be considered investment and/or tax advice. I am a private investor from Europe and share my investing journey here on Seeking Alpha. I am neither a licensed investment advisor nor a licensed tax advisor. Furthermore, I am not an expert on taxes and related laws – neither in relation to the U.S. nor other geographies/jurisdictions. It is not my intention to give financial and/or tax advice, and I am in no way qualified to do so. Although I do my best to make sure that what I write is accurate and well researched, I cannot be held responsible and accept no liability whatsoever for any errors, omissions, or for consequences resulting from the enclosed information. The writing reflects my personal opinion at the time of writing. If you intend to invest in the stocks or other investment vehicles mentioned in this article – or in any investment vehicle generally – please consult your licensed investment advisor. If uncertain about tax-related implications, please consult your licensed tax advisor.

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