What's behind Exxon's mega-merger and the stocks that could be next

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Here's how Exxon Mobil's deal for Pioneer changes the outlook for investors and the landscape of U.S. oil production.

Exxon Mobil announced Wednesday morning it struck a massive deal to buy Pioneer Natural Resources , strengthening its position as an oil producer at a time when energy is rising as a geopolitical concern but the sector's stocks have struggled to make up for years of underperformance. The all-stock deal, valued at roughly $60 billion , is expected to close in 2024 and would expand Exxon's production in a key area of the United States.

RBC Capital Markets analyst Biraj Borkhataria said in a note to clients Wednesday that Chevron could be one name to watch as a buyer. "We would expect some investors to question whether CVX may be propelled to make a sizeable acquisition following XOM, however we would note that the management track record is to be patient , while this deal effectively removes the main competition for CVX on large-scale M & A," the RBC note said.

 

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