Marathon Oil (MRO.US) shareholders voted to approve Conocophillips' (COP.US) $16bn acquisition offer.

Zhitong Finance learned that Marathon Oil Corp. (MRO.US) said on Thursday that its shareholders approved Conocophillips Corp. (COP.US) $16bn takeover offer. No further details were provided. The two companies expect the transaction to close in the fourth quarter of 2024; subject to regulatory approvals and other customary closing conditions.

Conocophillips said the $22.5bn deal (including debt) announced in May would add highly complementary acreage to its existing onshore US portfolio, adding more than 2bn barrels of resources, with an average supply cost of less than $30/barrel. Conocophillips said it expects to achieve $500m of cost and capital synergies in the first full year following the closing of the transaction, given the proximity of the acquired assets.

The Conocophillips takeover of Marathon Oil has not been a smooth ride since the acquisition offer was made. In July, Conocophillips said it had received a second request from the US Federal Trade Commission for information about its acquisition of its rival Marathon Oil. In August, a shareholder of Marathon Oil sued to block Conocophillips' acquisition plans, claiming the $17bn offer “grossly undervalued” the company.

The all-stock deal is part of a wave of mergers and acquisitions in the major oil and gas industry, which will give Conocophillips control of assets in Texas, North Dakota and the Permian Basin. Mergers and acquisitions in the oil and gas industry have been busy, with the wave of deals in 2023 continuing into this year.

The Permian Basin has become the most productive oilfield in the western hemisphere, making the US the world's largest oil producer. The low cost and easy drilling of shale oil wells has allowed oil companies to quickly ramp up production when needed. It marks a revolutionary change for large oil companies, which previously avoided the Permian Basin because they doubted whether the oil wells there could produce enough oil over a long enough period to generate huge profits.