Antitrust enforcement has become bipartisan, with Democrats and Republicans locking hands to oppose mergers in such areas as tech, airlines, and grocery.
- But there is one giant exception: energy.
Driving the news: Thirty-eight GOP senators last week sent a letter to FTC chair Lina Khan, arguing against Democrats' request for antitrust action on oil and gas mergers, Axios Pro's Jael Holzman scoops.
- Sen. Ted Cruz (R-Texas) and Senate Minority Leader Mitch McConnell (R-Ky.) are the letter's first two signers.
- It appears to be specifically aimed at heading off FTC action on a pair of proposed $60 billion mergers: ExxonMobil/Pioneer and Chevron/Hess.
Zoom in: The letter argues that producers should be viewed in a global context, whereby U.S. giants like ExxonMobil and Chevron hold relatively small market share.
- The letter adds that the FTC has no business considering how mergers could impact climate change, as Democrats assert, but should view increased production as a net positive for consumers.
- Finally, the Republicans indirectly raise the specter of the "major questions" doctrine, which could thwart antitrust action in an area that Congress hasn't explicitly authorized the FTC to regulate.
Reality check: The FTC under former President Trump successfully blocked a mega-merger between U.S. coal producers Peabody Energy and Arch Resources.
The big picture: Energy has been one of the M&A market's bright spots, including a recent boom in shale deals.
- LSEG reports that "energy and power" was the second-busiest sector for deals in Q1 2024, with aggregate value rising 48% year-over-year.
- Just this morning, oilfield services firm SLB agreed to buy smaller rival ChampionX for $7.75 billion in stock.
The bottom line: This political fissure could spark even more energy mergers, with companies believing there is an open lane for approval, even if it's relatively narrow.
Go deeper: Debate grows among experts over merging America's merger regulators
