Senate Majority Leader Chuck Schumer coaxed the U.S. Federal Trade Commission on Wednesday to probe the recent multibillion dollar acquisitions by Exxon Mobil and Chevron for potential antitrust violations.
Schumer sent a letter Wednesday to Federal Trade Commission Chair Lina Khan, alleging that Exxon's merger with Pioneer Natural Resources and Chevron's deal for Hess are "likely to harm competition," according to Bloomberg.
Exxon Mobil and Chevron recently made significant moves that bolstered their holdings in the Permian Basin and in South America, respectively. Chevron's $53 billion purchase of Hess and Exxon Mobil's $60 billion deal for PXD mark the oil industry's most intense consolidation in more than two decades.
"Should the FTC determine that these mergers would violate antitrust law, we urge you to oppose them," Schumer wrote to Khan.
Schumer signed the letter along with fellow Senate Democrats including Richard Blumenthal of Connecticut, Cory Booker of New Jersey, Tammy Duckworth of Illinois, John Fetterman of Pennsylvania and Amy Klobuchar of Minnesota. The group also voiced concern that the deals could consolidate control of gasoline prices at the pump in the U.S.
Chevron Chief Executive Mike Wirth during the Oct. 23 call on its Hess acquisition said CVX does not "see any antitrust concerns" in the U.S. or Guyana.
"We think this is good for the shareholders of both companies. It's also good for energy security," Wirth said. "We'll work closely with the antitrust authorities and satisfy their need for information, but really, don't see anything here."
Chevron stock, a Dow Jones component, dropped 1.2% to 143.97 Wednesday during market action. On Tuesday, CVX shares fell 0.3% to 145.73. Meanwhile, S&P 500's Exxon Mobil stock edged down 0.2% to 105.63 Wednesday.
Exxon Mobil Stock, Chevron Drop After Deals, Earnings
Since Exxon Mobil announced its merger with PXD on Oct. 11, XOM shares have slipped around 1%. Meanwhile, Chevron stock has shed more than 9% since it reported its deal for Hess on Oct. 23.
The two energy giants fell Friday after both reported worse-than-expected third-quarter earnings, with quarterly profit declining more than 40% as results ran up against 2022 earnings comparisons boosted by oil prices forced higher by Russia's war on Ukraine.
Chevron stock ended last week down more than 13%. Exxon Mobil stock took a 5% loss for the week.
Exxon Mobil stock has a 60 Composite Rating of 99. The S&P 500 component has a 65 Relative Strength Rating and a 12 EPS Rating.
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