Chevron to acquire Anadarko Petroleum in $33 billion deal
The US-based oil and gas major has announced its plan to acquire Anadarko Petroleum in a cash and stock deal that will unlock run-rate synergies of $2 billion a year.
Following the announcement, Anadarko’s share price climbed close to 30% in premarket trading, hitting $60.95 a share, while Chevron’s share price edged lower after the news.
Chevron to pay significant premium to acquire rival
Chevron’s offer values Anadarko at $65 a share, representing a 37% premium on its closing price on Thursday.
Under the terms of the offer and based on Chevron’s closing share price on Thursday, Anadarko’s shareholders will receive 0.3869 shares in Chevron and $16.25 in cash per share.
‘This takes a great company and makes it even better,’ Chevron’s Chairman and CEO Michael Wirth told CNBC’s Squawk Box immediately after the news broke. ‘As our company has strengthened its financial situation over recent years, we’re always looking to make our portfolio even stronger.’
Chevron looks to divest up to $20 billion of assets
The Chevron-Anadarko deal remains subject to regulatory approval, but so long as there are no competition concerns raised by regulators it is expected to close in the second half of 2019.
If the deal is approved, Chevron said that it plans to ramp up its annual share buyback programme to $5 billion, up from $4 billion.
The oil and gas major also said that it plans to divest between $15 billion to $20 billion of assets from 2020-2022.
‘This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion, and will be accretive to free cash flow and earnings one year after close,’ Wirth said in a company statement.
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