ConocoPhillips (NYSE:COP) entered into an agreement and plan of merger to acquire Concho Resources Inc. (NYSE:CXO) for $9.7 billion on October 18, 2020. Under the terms, each share of Concho Resources common stock will be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock. Until the time of closing ConocoPhillips and Concho Resources will remain as separate entities. ConocoPhillips will exist post this transaction. In case of the termination of the agreement, Concho would be required to pay ConocoPhillips a termination fee of $300 million and similarly ConocoPhillips would be required to pay Concho a termination fee of $450 million. In addition, if the Merger Agreement is terminated because of a failure of ConocoPhillips' stockholders or Concho's stockholders to approve the applicable proposals, ConocoPhillips or Concho, as applicable, may be required to reimburse the other party for its expenses in an amount equal to $142.5 million or $95 million, respectively. Upon closing, Concho's Chairman and Chief Executive Officer Tim Leach will join ConocoPhillips' board of directors and executive leadership team as Executive Vice President and President, Lower 48 and will be reporting to Ryan Lance and will have offices in both Midland and Houston. For an integration planning team consisting of representatives from both ConocoPhillips and Concho Resources, Dominic Macklon will be the ConocoPhillips lead and Will Giraud will be the lead of Concho Resources, this team is being formed to ensure that required business processes and programs are implemented seamlessly post closing. Upon the completion of the merger, the current directors and executive officers of ConocoPhillips are expected to continue in their current positions. Jack Harper, Concho's President becoming President, Permian of ConocoPhillips and Will Giraud, Concho's Executive Vice President and Chief Operating Officer becoming Vice President and Chief Commercial Officer of ConocoPhillips, in each case, effective upon the effective time of the merger.

The completion of the Merger is subject to satisfaction or waiver of certain customary mutual closing conditions, including, regulatory approvals, the receipt of the required approvals from ConocoPhillips stockholders and Concho stockholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the effectiveness of the registration statement on Form S-4 to be filed by ConocoPhillips pursuant to which the shares of ConocoPhillips common stock to be issued in connection with the Merger are registered with the Securities and Exchange Commission and the authorization for listing of ConocoPhillips common stock to be issued in connection with the Merger on the NYSE. The transaction is unanimously approved by the boards of ConocoPhillips and Concho Resources. As on November 30, 2020, the waiting period under the HSR Act has expired. The ConocoPhillips board of directors unanimously approved the transaction and recommends that its shareholders vote "FOR" the transaction.

The transaction is expected to close in first quarter of 2021 and is expected to be Accretive on Consensus Key Financial Metrics including earnings, free cash flow and free cash flow yield. As on December 7, 2020, ConocoPhillips and Concho shareholders are invited to virtually attend a special meeting of stockholders on January 15, 2021, at 9:00 a.m. to consider and vote upon a proposal to adopt the merger agreement and a non-binding advisory proposal to approve certain compensation that may be paid or become payable to Concho's named executive officers that is based on or otherwise relates to the merger. 

Goldman Sachs & Co. LLC is serving as exclusive financial advisor and fairness opinion provider to ConocoPhillips, and Andrew R. Brownstein, Gregory E. Ostling and Zachary S. Podolsky of Wachtell, Lipton, Rosen & Katz is serving as ConocoPhillips' legal advisors. Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are acting as financial advisors and provided fairness opinion to Concho. John E. Estes, Matthew M. Friestedt, Steven L. Holley, Krishna Veeraraghavan and S. Eric Wang of Sullivan & Cromwell LLP is acting as legal advisors to Concho. Alston & Bird LLP acted as legal advisor for the financial advisors- Credit Suisse and J.P. Morgan Securities. Morrow & Co., LLC acted as information agent to ConocoPhillips and will receive a fee of $35,000 for its services. MacKenzie Partners, Inc. acted as information agent to Concho and will receive a fee of $100,000 for its services. Goldman Sachs & Co. LLC will receive a fee of $30 million of which $1.5 million will be payable upon the delivery of fairness opinion. J.P. Morgan Securities LLC will receive a fee of $25 million, of which $2 million will be payable on the delivery of the fairness opinion. Credit Suisse Securities (USA) LLC will a receive a fee of $25 million of which $2 million will be payable upon the delivery of the fairness opinion.

ConocoPhillips (NYSE:COP) completed the acquisition of Concho Resources Inc. (NYSE:CXO) on January 15, 2021. The shareholders of ConocoPhillips and Concho Resources approved the transaction.