The closing of the merger of Chesapeake Energy and Southwestern Energy, which would create the top U.S. natural gas producer, is being pushed back to the second half of 2024 as the U.S. regulator has asked for additional information in its review of the transaction, the companies said on Friday.
Back in January, Chesapeake Energy and Southwestern Energy agreed to merge in an all-stock transaction valued at $7.4 billion, which will create the biggest U.S. natural gas producer by market value and production. At the time of the announcement, the merger was expected to close in the second quarter of 2024.
However, the closing is now pushed back to the second half of the year, after the Federal Trade Commission (FTC) sent Chesapeake and Southwestern each a request for additional information and documentary materials, or the so-called second request, in connection with the FTC's review of the merger.
"Chesapeake and Southwestern will continue to work cooperatively with the FTC in its review of the Merger, and now expect that the Merger will be completed in the second half of 2024, subject to the fulfillment of the other closing conditions, including approvals of Chesapeake and Southwestern shareholders," the companies said in identical filings to the SEC.
Requests for additional information have also delayed the closing of Occidental's $12-billion deal to buy CrownRock. The closing will be delayed to the second half of 2024 as the FTC has asked for additional information while it reviews the proposed transaction, Oxy said in February.
In March, nearly 50 Democratic Senators and Representatives urged the FTC to investigate the recent mergers in America's oil and gas sector amid concerns that they would harm competition and hurt consumers.
In a letter to FTC chair Lina Khan, the Democratic Members of Congress, led by Senate Majority Leader Chuck Schumer, wrote that the recent wave of oil and gas industry consolidation "threatens competition in the industry and could lead to higher prices and fewer choices for businesses across the supply chain, suppress worker wages, and make heating, cooling, and gas at the pump more expensive for consumers."
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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