The U.S. oil company Anadarko has agreed to be acquired by Occidental Petroleum after Chevron on Thursday said it wouldn’t raise a previously placed takeover bid.
Following Chevron’s announcement, Anadarko on Thursday said it had entered into a definitive merger agreement with Occidental Petroleum Corporation under which Occidental will acquire all of the outstanding shares of Anadarko for consideration consisting of $59.00 in cash and 0.2934 of a share of Occidental common stock per share of Anadarko common stock. The deal is estimated at $38 billion.
Chevron had offered 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share, in a transaction estimated at $33 billion.
Anadarko also confirmed that to entering into the merger agreement with Occidental, it terminated its previously announced merger agreement with Chevron Corporation.
“In accordance with the terms of that agreement, Anadarko has paid a termination fee of $1 billion to Chevron,” Anadarko said.
Al Walker, Chairman and Chief Executive Officer of Anadarko, commented, “We are pleased to have reached an agreement with Occidental that delivers significant, near-term value to our shareholders. Anadarko’s employees have strategically assembled a premier portfolio of world-class assets, and this transaction would not have been possible without our board’s leadership over the past several months. We are proud of the substantial premium we have delivered to our shareholders and look forward to working with Occidental to ensure a smooth transition.”
The transaction is expected to close in the second half of 2019, subject to approval by Anadarko shareholders, regulatory approvals and other customary closing conditions. Occidental has obtained committed financing for the entire cash portion of the aggregate transaction, and completion of the transaction will not require Occidental’s stockholders approval.
Occidental plans to fund the cash portion of the consideration through a combination of cash from its balance sheet and fully committed debt and equity financing, including proceeds from the previously announced $10 billion equity investment by Berkshire Hathaway, Inc.
Vicki Hollub, President and Chief Executive Officer of Occidental: “This exciting transaction will create a global energy leader with a world-class portfolio, proven operational capabilities and industry-leading free cash flow metrics.”
She said that the transaction “further establishes Occidental as a premier operator in prolific global oil and gas regions with the ability to deliver production growth of 5% through investment in projects with industry-leading returns.”
Hollub said: “With greater scale, an unwavering focus on driving profitable growth, and our commitment to growing our dividend, we are creating a unique platform to drive meaningful shareholder value.”
Offshore Energy Today Staff
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