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ConocoPhillips strikes US$9.7bn deal to buy Concho Resources

“Concho is a tremendous fit with ConocoPhillips," said Ryan Lance.

ConocoPhillips - ConocoPhillips strikes US$9.7bn deal to buy Concho Resources

ConocoPhillips (NYSE:COP) has struck a deal with US shale group Concho Resources Inc (NYSE:CXO) in a deal valued at US$9.7bn.

It will be an all paper transaction with Concho sharesholders receiving 1.46 Conoco shares for each Concho share they own – which pitches the value of the deal at US$49.30 per share.

The deal is marked some 45% beneath the US$93 per share level seen for Concho back in January.

In Monday’s pre-market trading, Concho is indicated 2.63% higher at US$49.88.

Conocco expects to achieve around US$500mln of savings as a result of the consolidation.

“The leadership and boards of both companies believe today’s transaction is an affirmation of our commitment to lead a structural change for our vital industry,” said Ryan Lance, ConocoPhillips chief executive.  “Concho is a tremendous fit with ConocoPhillips.

“Together, ConocoPhillips and Concho will have unmatched scale and quality across the important value drivers in our business: an enviable low cost of supply asset base, a strong balance sheet, a disciplined capital allocation approach, ESG excellence and great people.”

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