ExxonMobil Corp will acquire XTO Energy for $41 billion in an all-stock transaction which will boost the oil giant's presence in unconventional natural gas business.
Both companies have entered into an agreement for the $41 billion deal, which is expected to close in the second quarter of 2010, ExxonMobil and XTO said in a statement today.
As per the pact approved by the boards of the two firms, ExxonMobil would issue 0.7098 common shares for each common share of XTO, a US unconventional natural gas producer.
The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on December 11.
The deal would "enhance ExxonMobil's position in the development of unconventional natural gas and oil resources," the statement added.
Once the deal is complete, ExxonMobil would establish a new upstream organisation to manage global development and production of unconventional resources.
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"The agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth," ExxonMobil's Chairman and CEO Rex W Tillerson said.
XTO's resource base is the equivalent of 45 trillion cubic feet of gas and includes shale gas, tight gas, coal bed methane and shale oil.