The oil company ConocoPhillips pays 8.2 billion in shares for the 'fracking' firm Concho Resources

View of the main building of ConocoPhillips in Anchorage, Alaska in February.YERETH ROSEN / Reuters

The US oil company ConocoPhillips reached a "definitive agreement" on Monday for the purchase of the

firm

Concho Resources through a share exchange operation for a value of 9.7 billion dollars (8.237 billion euros) that will result in to a giant of the sector.

The transaction, subject to the approval of the shareholders of ConocoPhillips and Concho, will be carried out through the delivery of 1.46 own shares for each title of Concho and is expected to be completed in the first quarter of 2021. The purchasing entity has suspended share buybacks until after the transaction closed.

The companies estimate that the merger will generate annual cost synergies of $ 500 million (424 million euros) by 2022 by reducing general and administrative expenses, not including additional cost savings in capital efficiency of the supply chain. supply, commercial and exploration.

When the transaction is complete, Concho Resources President and CEO Tim Leach will join the ConocoPhillips board of directors as executive vice president and president.

“Concho is a perfect fit with ConocoPhillips.

Together, ConocoPhillips and Concho Resources will have unmatched scale and quality, ”said Ryan Lance, president and CEO of the US oil company.