With a proven carbon dioxide (CO2) sequestration facility, Exxon Mobil Corp (XOM.N) on Thursday agreed to pay $4.9 billion to acquire Denbury Inc (DEN.N). This will help the company advance its energy transition business.

The deal gives Exxon ready-made CO2 transportation and highlights its bets on turning carbon capture into a lucrative industry, but it also caused shares of both businesses to decline. A rush to develop carbon capture sites has been sparked by U.S. tax credits for decreasing global warming pollutants.

However, due to the high costs and technical difficulties, which were reflected in the transaction price, the widespread adoption of carbon sequestration is still doubtful. Denbury was valued by Exxon’s all-stock offer at a 1.9% premium to its stock price as of Wednesday’s close.

Denbury CEO Chris Kendall said in a statement that “significant capital and years of work” are required to fully develop its CO2 business, making deep-pocketed Exxon “the ideal partner with extensive resources and capabilities.”

Denbury, an oil and gas producer based in Plano, Texas, owns and runs a 1,300-mile network of CO2 pipelines across the United States, including pipelines that cross the region of the Gulf Coast where Exxon has wanted to establish a carbon hub.

According to Sam Burwell, an analyst at Jefferies, Exxon paid $1.9 billion for the carbon capture technology at Denbury and $3 billion for its oil production.

“The modest 2% takeout premium suggests to us that Denbury realized the difficulty in competing with Exxon to win CO2 offtake,” he wrote in a note.

Exxon established its Low Carbon Solutions division two years ago with the goal of reducing its and its clients’ emissions in order to generate hundreds of billions of dollars in income.