They say all news is good news, but when the executive who heads up the business unit that’s involved in your potential $58 billion megamerger with your rival is arrested for sexual assault before the deal, ExxonMobil must wonder about the wisdom of that statement.

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Exxon set to buy shale rival Pioneer

ExxonMobil is expected to announce today that it will buy US rival Pioneer Natural Resources for $58 billion. It will be the largest acquisition by any company this year so far, and Exxon's biggest since its $81 billion purchase of Mobil Oil back in 1998.

Exxon, which was valued at $442 billion on Tuesday, is expected to make a pure stock offer of more than $250 a share for the shale producer. Pioneer shares closed at $237.41 yesterday, having risen 11% since the first reports of a deal surfaced last Thursday.

Even though this deal would make Exxon the biggest oil producer atop the largest US oilfield, some think the deal will actually curb output growth there. US oil producers may be pumping more oil, but consolidation, steep cost inflation and investor demands for returns have shrunk production growth – and this is another step in the same direction.

The deal will no doubt be heavily scrutinized on antitrust grounds, but lawyers think that the White House will struggle to thwart it.

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