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Democratic Senators, led by Chuck Schumer, have called for an investigation into ExxonMobil’s $59.5 billion acquisition of Pioneer Natural Resources and Chevron’s $53 billion purchase of Hess Corporation, citing potential antitrust violations. The lawmakers are concerned that these transactions could disrupt competition, increase gasoline prices, and have negative effects on smaller enterprises and wage levels due to potential anti-competitive coordination.
The Senators expressed unease over the oil industry’s continued reliance on fossil fuels, particularly in light of growing public demand for environmental sustainability. They also noted that past consolidations leading to the formation of Exxon and Chevron had similar detrimental impacts on the competitive landscape.
The acquisitions are set to establish Exxon as the leading crude oil producer in the Permian region and expand Chevron’s assets offshore Guyana and in the U.S. Bakken shale play. These vertically integrated operations could potentially disrupt competition and drive up gasoline prices in national or regional markets.
The lawmakers have urged the Federal Trade Commission (FTC) to thoroughly examine these transactions. They fear that the deals could lead to higher consumer prices, restrict US oil production, and negatively affect smaller enterprises. The Senators’ call for scrutiny underscores a broader concern about the impact of such mega-deals on competition and consumer prices.
InvestingPro Insights
According to InvestingPro, ExxonMobil (XOM) and Chevron (CVX) are both prominent players in the Oil, Gas, and consumable Fuels industry. ExxonMobil has raised its dividend for 41 consecutive years and is expected to be profitable this year, as per InvestingPro Tips. It operates with a moderate level of debt, and its cash flows can sufficiently cover interest payments.
Chevron, on the other hand, has raised its dividend for 36 consecutive years and is also predicted to be profitable this year. It’s worth noting that the company’s stock is currently in oversold territory, according to the Relative Strength Index (RSI).
InvestingPro’s real-time data reveals that ExxonMobil has a market cap of $420.98 billion and a P/E ratio of 10.54, while Chevron stands at a market cap of $272.22 billion and a P/E ratio of 10.71. In the last twelve months as of Q3 2023, ExxonMobil has seen a revenue of $349.84 billion, while Chevron’s revenue was $202.73 billion.
These data points and tips are part of the numerous insights available on InvestingPro, which provides a comprehensive analysis of various companies. It’s worth noting that there are more than 9 additional tips for each of these companies available on InvestingPro.
