Anadarko Petroleum has signed an agreement to merge with Occidental Petroleum in a deal worth $57bn, terminating a previously announced merger agreement with Chevron.
Image: Aerial view of Anadarko Petroleum's headquarters in The Woodlands, Texas. Photo: courtesy of Trey Perry (talk)/Wikipedia.
Anadarko has paid a termination fee of $1bn to Chevron for canceling the merger agreement.
In April, Occidental launched a takeover proposal to acquire Anadarko in a cash-cum-stock deal worth $57bn, including the assumption of the latter’s net debt.
The rival bid was launched after the California-based Chevron signed a definitive agreement to acquire Anadarko in a deal valued at $50bn.
Taking into the superior offer made by Occidental, Anadarko recently announced its intention to terminate its agreement with Chevron.
Anadarko chairman and chief executive officer Al Walker said: “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 merger is expected to create a more than $100bn global energy company with around 1.4 million barrels of oil equivalent per day (Boe/d) of production.
In addition, the transaction will enable Occidental to become the largest producer in the Permian basin with 533 thousand boe/d of production.
Occidental president and chief executive officer said: “This exciting transaction will create a global energy leader with a world-class portfolio, proven operational capabilities and industry leading free cash flow metrics.”
Subject to approval by Anadarko shareholders, regulatory approvals and other customary closing conditions, the transaction is expected to close in the second half of 2019.
Occidental has secured committed financing to fund the entire cash portion of the aggregate transaction.
Recently, Berkshire Hathaway has committed an equity investment of $10bn in Occidental, if the latter enters into and completes a transaction to acquire Anadarko.