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NEW YORK/HOUSTON (Reuters) – Exxon Mobil announced on Tuesday the acquisition of its American competitor Pioneer, as part of a stock transaction valued at $59.5 billion (56.14 billion euros) that would make ‘Exxon the main operator of the largest oil field in the United States and would provide it with a decade of low-cost production.

The transaction, valued at $253 per share, would be Exxon’s largest deal since purchasing Mobil Oil in 1998, and is expected to close in early 2024, the two companies said Wednesday. Pioneer shares were up 2.4% in pre-market trading, with Exxon down 1%.

The offer represents a 9% premium to Pioneer’s average share price in the 30 days preceding October 5, when news of the deal surfaced.

“The combined capabilities of our two companies will enable long-term value creation far beyond what either of them is capable of on its own,” Exxon Chief Executive Darren Woods said in a statement.

With this agreement, four of the largest American oil companies will control most of the Permian Basin deposit, located in west Texas, as well as its oil infrastructure.

According to RBC analysts, Pioneer is the largest operator in the Permian Basin, with 9% of gross production, while Exxon is fifth with 6%.

“The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-yield wells in the Permian Basin,” said Pioneer Chief Executive Officer Scott Sheffield.

Exxon shares have recovered sharply since falling to around $30 in early 2020 following the collapse in oil and gas prices, recently reaching their all-time high of $120 per share.

(Reporting by Sabrina Valle in Houston, Anirban Sen in New York and Shubhendu Deshmukh in Bangalore; writing by Gary McWilliams; Augustin Turpin, editing by Kate Entringer)

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