Benzinga - by Chris Katje, Benzinga Staff Writer.
Oil giant Exxon Mobil Corporation (NYSE: XOM) is making headlines this week after agreeing to acquire Pioneer Natural Resources (NYSE: PXD) in one of its largest acquisitions in company history.
Here’s a look at today's Pioneer deal, as well as a look back at the company’s previous — and biggest — acquisition.
What Happened: After rumors of a mega deal, Exxon Mobil formally announced its plans to acquire Pioneer Natural Resources for a total of $64.5 billion, or $253 per share.
Pioneer shareholders will receive 2.3234 shares of Exxon Mobil for each PXD share they hold.
The acquisition is one of many made by Exxon Mobil, which has a market capitalization of over $420 billion. The company is also one of the top 10 companies ranked by annual revenue.
This marks the biggest deal by Exxon Mobil since its two namesake brands, Exxon and Mobil, merged in 1999.
“This merger will enhance our ability to be an effective global competitor in a volatile world economy and in an industry that is more and more competitive,” Exxon Mobil executives said at the time.
The $81-billion deal was met with antitrust concerns as it combined two of the world's biggest oil companies.
Related Link: Exxon Mobil's Upstream Earnings Shine Despite Refining, Chemicals Margins Concerns
Investing $1,000 in Exxon Mobil Stock: Shares of Exxon Mobil traded for a split adjusted $40.09 on Nov. 30, 1999 when the merger between the two companies was approved.
An investor could have purchased 24.94 shares of the oil company. Based on a price of $105.68 for XOM at the time of writing, the $1,000 investment would be worth $2,635.66 today. This marks a hypothetical return of 163.6% over the last 24 years.
While that may not sound like a substantial return, Exxon Mobil has also been a strong dividend payer over the years with a current yield of around 3.3%.
When factoring in the dividends paid out over the last 24 years, the split and dividend adjusted price for XOM was $18.91 on Nov. 30, 1999. A $1,000 investment based on this starting price would be worth $5,585.36 today. This marks a return of 458.8% and shows the power of dividends.
While Exxon Mobil shares may not produce the same returns over the next 24 years, today’s acquisition announcement could be one of many that power the company’s growth going forward.
Read Next: Oil Stocks Rise As Israel, Hamas Conflict Intensifies
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.