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Exxon's Pioneer Merger with Blockbuster Requires Biden's Approval

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Exxon's Potential Merger with Pioneer Requires Biden's Approval

Exxon Mobil Corp. is seeking approval from the Biden administration for its proposed takeover of independent oil and gas producer Pioneer Natural Resources Co., which could be the largest deal of the year. However, obtaining approval may not be an easy task due to the Biden administration's focus on curbing gasoline prices and investigating high gas prices. President Joe Biden has specifically mentioned Exxon's record profits and accused the company of making excessive profits. The US Federal Trade Commission (FTC) is expected to closely scrutinize the deal, which could be worth up to $60 billion.

Antitrust Scrutiny and Potential Challenges

The FTC has recently increased its scrutiny of oil and gas industry deals, particularly with the appointment of Lina Khan as chair. The Permian Basin, where both Exxon and Pioneer operate, is currently experiencing peak drilling activity, and the FTC may be interested in the dominant position the combined firm would hold in the basin. The agency may also examine the impact of the deal on specialized workers in the industry.

Consolidation and Competition Concerns

Critics argue that consolidation in the oil industry could lead to reduced competition and increased prices. They believe that the merger could give Exxon more control over output and prices, exacerbating the symptoms of reduced competition. Some experts suggest that enforcers should carefully investigate the acquisition to ensure it does not harm competition. In conclusion, Exxon's potential merger with Pioneer requires approval from the Biden administration, and the deal will face close scrutiny from the FTC. The antitrust implications and concerns over consolidation in the oil industry may impact the outcome of the merger and its potential effects on competition and prices in the market.

Implications of Exxon's Potential Merger for New Businesses

Exxon Mobil Corp.'s proposed merger with Pioneer Natural Resources Co. could have significant implications for new businesses in the oil and gas industry. The merger, which requires approval from the Biden administration, could potentially be the largest deal of the year. However, the administration's focus on curbing gasoline prices and the FTC's increased scrutiny of industry deals may pose challenges.

Antitrust Concerns and Market Dominance

The FTC's scrutiny, particularly under the leadership of Lina Khan, could impact the merger's outcome and the industry landscape. The combined firm's potential dominance in the Permian Basin, a key area of drilling activity, could reshape competition and market dynamics. This could pose challenges for new businesses trying to establish themselves in the industry.

Consolidation and Its Impact on Competition

The merger could also lead to increased consolidation in the industry, potentially reducing competition and increasing prices. This could create a more challenging environment for new businesses. However, it could also spur innovation and drive businesses to differentiate themselves in other ways. In conclusion, Exxon's potential merger with Pioneer could reshape the oil and gas industry landscape, with significant implications for new businesses. The deal's outcome could influence market dynamics, competition, and the strategies that new businesses need to succeed.
Story First Published at: https://financialpost.com/pmn/business-pmn/exxons-blockbuster-pioneer-merger-needs-bidens-blessing-first
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