Chesapeake, Southwestern delay merger closing after FTC seeks more information

Chesapeake Energy (CHK.O), opens new tab and Southwestern Energy (SWN.N), opens new tab said on Friday the closing date of their proposed $7.4 billion merger has been pushed back to the second half of the year after receiving a U.S. regulator’s second request for information.

Chesapeake had agreed to buy smaller rival Southwestern Energy earlier this year and expected the deal to close by the second quarter of 2024.

U.S. lawmakers have sought increased scrutiny by the Federal Trade Commission (FTC) over multi-billion dollar deals. Nearly 50 Democrats in the U.S. Congress in March urged the regulator to probe oil and gas company deals and expand current investigations to protect consumers and industry competition.

Exxon Mobil (XOM.N), opens new tab and Pioneer Natural Resources (PXD.N), opens new tab received similar requests from the FTC related to their $60 billion merger, along with Chevron (CVX.N), opens new tab for its $53 billion buyout of Hess Corp (HES.N), opens new tab and Occidental Petroleum (OXY.N), opens new tab on its $12 billion bid for CrownRock.

Chesapeake and Southwestern said they would cooperate with the FTC in its review.

The combined company will have production of about 7.9 billion cubic feet equivalent per day (bcfepd), and surpass EQT Corp (EQT.N), opens new tab to become the largest independent natural gas exploration and production company in the United States by market value and output.

Shares of Chesapeake were down 1.2%, while Southwestern fell 1.7% as U.S. natural gas futures held near a one-week low.