Exxon Mobil  (XOM) – Get Free Report confirmed its plans to buy shale producer Pioneer Natural Resources  (PXD) – Get Free Report for around $60 billion Wednesday in the group’s biggest takeover deal in more than two decades.

Exxon will pay $253 per share for Pioneer in an all-stock deal that values the Irving, Texas-based group at around $59.5 billion. The price represents a 5.6% premium to its Tuesday closing price but around 20% north of the level that Pioneer traded prior to recent reports of Exxon’s renewed interest. 

Pioneer shareholders will get 2.3234 shares of Exxon for each of their holdings under terms of the deal, with the implied total value of the transaction, including debt, pegged at $64.5 billion. 

The takeover, if completed, would be the largest since the $81 billion merger between Exxon and Mobil in 1998 and the largest deal of the year in U.S. markets, topping Pfizer’s  (PFE) – Get Free Report $43 billion purchase of cancer-drug specialists Seagen  (SGEN) – Get Free Report in early March. 

“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. 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,” said Exxon CEO Darren Woods. 

“Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production,” he added. “As importantly, as we look to combine our companies, we bring together environmental best-practices that will lower our environmental footprint and plan to accelerate Pioneer’s net-zero plan from 2050 to 2035.” 

Exxon Mobil shares were marked 01.82% lower in pre-market trading to indicate an opening bell price of $108.50 each, while Pioneer shares jumped 1.1% to $240.01

For Exxon Mobil the deal would secure the industry’s largest stake in the Permian Basin, an oil-and-gas-rich expanse of land that runs through west Texas and New Mexico and is largely seen as a cheaper, more reliable area for drilling than other parts of the world.

“We maintain that founder CEO Scott Sheffield would be a willing seller, and an all-stock deal would make sense for tax and dividend yield purposes for senior management,” said KeyBanc Capital Markets analyst Tim Rezvan prior to formal confirmation of the deal. 

“This final transaction would be the last of many savvy deals for him since the advent of horizontal drilling in the Midland Basin in the early 2010s, which established Pioneer as one of the most core inventory-rich E&Ps in the most prolific U.S. shale oil basin, he added.”

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