ExxonMobil acquires shale rival Pioneer in $60bn deal

BY Fraser Tennant

In what is the largest acquisition announced in 2023 so far, US multinational oil and gas company Exxon Mobil Corporation is to acquire independent oil and gas exploration and production firm Pioneer Natural Resources in a transaction valued at $59.5bn.

Under the terms of the definitive agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The transaction is expected to close in the first half of 2024.

The merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating the industry’s leading high-quality undeveloped US unconventional inventory position. Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian.

“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge,” said Darren Woods, chairman and chief executive of ExxonMobil. “The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis.”

Additionally, the merger represents the opportunity for even greater US energy security by bringing the best technology, operational excellence, environmental best practices and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.

“The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin,” said Scott Sheffield, chief executive of Pioneer. “As part of a global enterprise, Pioneer, our shareholders and our employees will be better positioned for long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain.”

The transaction has been unanimously approved by the boards of directors of both companies, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Pioneer shareholders.

Mr Sheffield concluded: “The consolidated company will maintain its leadership position, driving further efficiencies through the combination of our adjacent, contiguous acreage in the Midland Basin and our highly talented employee base, with the improved ability to deliver durable returns, creating tangible value for shareholders for decades to come.”

News: Exxon secures lead in top US oilfield with $60 billion buy of shale rival Pioneer

Shift Technologies files for Chapter 11 bankruptcy

BY Fraser Tennant

Following multiple years of losses, omnichannel used-car dealer Shift Technologies, Inc. and its subsidiaries has filed for Chapter 11 bankruptcy in order to implement a systematic closure of its business.

According to the filing, the company’s deteriorating cash position and inability to obtain further financing drove it to file for bankruptcy and begin the process of closing down the business and liquidating assets.

To facilitate the Chapter 11 process, Shift intends to utilise cash on hand and cash generated by the liquidation of inventory through wholesale channels to provide the necessary liquidity to support the wind down and closure of operations – a decision taken after months of efforts to navigate through the challenges it faced.

Thus, the company’s two physical Californian locations in Oakland and Pomona, CA, as well as its website, have ceased operations. In addition, Shift has terminated 80 percent of its employees, leaving 24 to wind down operations. The company estimates the process will cost between $4.1m and $5m.

Founded in 2014 in an attempt to disrupt the traditional dealership model, Shift enjoyed significant success in the used car market, particularly during the height of the pandemic, before inflationary concerns, a cooling market, higher interest rates, tighter capital markets and overall economic uncertainty severely impacted activity.

A previous attempt to remain afloat, in July 2023, saw the company reduce its headcount by approximately 34 percent – a reduction aimed at restructuring and better aligning the company’s people and responsibilities with its omnichannel sales strategy.

“We deeply value our employees, customers, partners and the communities in which we have operated,” said Ayman Moussa, chief executive of Shift Technologies. “This was not the outcome we had expected or hoped to achieve. Ultimately, the extensive efforts of our senior leadership team and advisers were not successful. We want to thank all our dedicated employees, customers, and vendors who have supported us over the years.”

News: Shift Technologies intends to file for bankruptcy protection in US

Bristol Myers Squibb agrees $4.8bn Mirati deal

BY Richard Summerfield

Bristol Myers Squibb has agreed to acquire cancer drug manufacturer Mirati Therapeutics in a deal worth $4.8bn. The acquisition will see Bristol Myers Squibb diversify its oncology business with lung cancer drug Krazati, which was approved by the US Food and Drug Administration (FDA) in December. A second compound – MRTX1719 – which could be used in some types of lung cancer was also attractive to the company.

Under the terms of the deal, Bristol Myers Squibb will pay $58 per share in cash, for a total equity value of $4.8bn. Mirati stockholders will also receive one non-tradeable contingent value right (CVR) for each Mirati share held, potentially worth $12 per share in cash, representing an additional $1bn of value opportunity. The transaction was unanimously approved by both the Bristol Myers Squibb and the Mirati boards of directors.

According to a statement announcing the deal, Bristol Myers Squibb expects to finance the acquisition with a combination of cash and debt. The deal is expected to be dilutive to the company’s non-generally accepted accounting principles (GAAP) earnings per share by approximately 35 cents per share in the first 12 months after the transaction closes, the statement added.

“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” said Giovanni Caforio, chief executive and board chair of Bristol Myers Squibb. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.”

“Since our founding 10 years ago, Mirati has made significant strides in transforming the lives of patients living with cancer through the development of innovative therapies,” said Charles Baum, founder, president and chief executive of Mirati Therapeutics, Inc. “Through our discovery and development of next-generation targeted cancer therapeutics, we have built a robust pipeline of potentially best-in-class treatments that offer renewed hope for patients. This transaction is a testament to the potential of our platform and to our team’s hard work and dedication to changing lives.

“Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster, and deliver on our vision of unlocking the science behind the promise of a life beyond cancer. We believe that this transaction is the best way to benefit patients and maximize value for shareholders,” he added.

“Mirati strengthens and complements our current portfolio by adding assets focused on intrinsic tumor targets in the MTAP and MAPK pathways,” said Samit Hirawat, chief medical officer and head of global drug development at Bristol Myers Squibb. “We believe Mirati’s assets have the potential to change the standard of care in multiple cancers, both as standalone therapies and in combination with Bristol Myers Squibb’s existing pipeline. We are excited about the significant potential that this transaction creates to transform patients’ lives through science around the world.”

News: Bristol-Myers Squibb to acquire Mirati in up to $5.8 billion deal

Eli Lilly agrees $1.4bn Point Biopharma Global deal

BY Richard Summerfield

In a deal which will strengthen the company’s oncology pipeline, Eli Lilly has announced it is acquiring Point Biopharma for $1.4bn.

Under the terms of the deal, Eli Lilly will pay $12.50 per outstanding share of Point, representing a 67 percent premium to the company’s 30-day volume-weighted average price and a premium of approximately 87 percent to Point’s closing stock price on 2 October 2023, the last trading day before the announcement of the transaction. The board of directors of both companies have approved the transaction, and Lilly and Point expect to close the deal toward the end of 2023, subject to customary closing conditions.

“Over the past few years, we have seen how well-designed radiopharmaceuticals can demonstrate meaningful results for patients with cancer and rapidly integrate into standards of care, yet the field remains in the early days of the impact it may ultimately deliver,” said Jacob Van Naarden, president of Loxo@Lilly, the oncology unit of Eli Lilly and Company. “We are excited by the potential of this emerging modality and see the acquisition of POINT as the beginning of our investment in developing multiple meaningful radioligand medicines for hard-to-treat cancers, as we have done in small molecule and biologic oncology drug discovery and development. We look forward to welcoming POINT colleagues to Lilly and working together to build upon their achievements as we develop a pipeline of meaningful new radioligand treatments for patients.”

“The combination of POINT’s team, infrastructure and capabilities with Lilly’s global resources and experience could significantly accelerate the discovery, development and global access to radiopharmaceuticals,” said Joe McCann, chief executive of Point. “I look forward to a future where patients all over the world can benefit from the new cancer treatment options made possible by the joining of our two companies today.”

Eli Lilly has agreed to a string of deals this year, including the $2.4bn buyout of Dice Therapeutics, the $1.93bn purchase of privately held Versanis, and Siglon for around $310m. These deals have been oncology focused, and the deal for Point will grant Eli Lilly access to experimental therapies that enable precise targeting of cancer. Point Biopharma is currently testing radioligand therapy candidates, PNT2002 and PNT2003, in late-stage studies. Topline data from these studies are expected in the fourth quarter of 2023.

News: Lilly eyes targeted cancer therapies with $1.4 billion Point Biopharma deal

European VC investment €96bn over last 10 years, reveals new report

BY Fraser Tennant

Venture capitalists (VCs) invested €96bn in almost 27,000 European companies over the past decade, including more than €18bn in 2022 alone, according to a new report by Invest Europe.

In its ‘Venture Capital: Fuelling European Innovation’ report, Invest Europe highlights VC’s contribution to a stronger European economy and a better society – digging deep into the data on fundraising, investment, returns to investors and job creation, among others.

The report shows the step change in European VC fundraising over the five years to 2022, including an eight-fold increase in capital raised by Nordic VCs and a three-fold increase in the Germany, Austria and Switzerland (DACH) region, as capital committed to funds reached a record €23bn last year.

In addition, Invest Europe highlights European VC’s 12 percent net return since inception, far outperforming the Morgan Stanley Capital International (MSCI) Europe benchmark, which returned 7.67 percent per annum over the same period.

Furthermore, recent performance has accelerated, with European VC delivering a net return of 23.07 percent over 10 years, creating wealth for long-term investors including funds of funds investing on behalf of pension funds, family offices and corporate investment divisions.

“European VC is the fuel that keeps the engine of innovation running,” said Eric de Montgolfier, chief executive of Invest Europe. “With the help of VC investment and expertise, European start-ups are at the forefront of developments in software and cloud computing, driving deep tech advances in artificial intelligence and robotics, creating cutting-edge biotech treatments for cancer and infectious diseases, and pushing the boundaries of cleantech solutions for a cleaner, greener future.”

The report also outlines the role of venture capital as a cornerstone of European economies and communities, with the ecosystem providing jobs for nearly 900,000 people at the end of 2021. Companies backed by VC have generated double-digit employment growth in most years since 2018, including 15.3 percent net new jobs in 2021, compared to 1.2 percent growth for all European companies.

Mr de Montgolfier concluded: “Europe’s VC and start-up ecosystem is not only producing transformative technologies that will change people’s lives; it is also generating social and economic benefits that can improve livelihoods, from new jobs to wealth creation for long-term investors.”

Report: Venture Capital: Fuelling European Innovation Report