The planned merger between major US oil and gas companies Chevron and Unocal has been thrown into fresh doubt by the emergence of a rival bid from Chinese energy company CNOOC.
In April of this year Unocal agreed to be acquired by Chevron Corporation in an acquisition valued at $17 billion, or $62 per share. Due processes related to the merger had been completed and the deal seemed to be following a natural course to finalization.
However, in a dramatic move, CNOOC, an affiliate of China National Offshore Oil Company, has now put a potential spanner in the works with an unsolicited offer of $67 per share in cash, representing a total price of $18.5 billion.
Unocal has received a waiver from Chevron enabling it to engage in discussions with CNOOC and its representatives. They have until the date of the Unocal stockholder vote on the proposed merger with Chevron, which has not been set yet, to finalize any deal.
Unocal said that it intends to commence discussions with CNOOC as soon as possible. However, the independent fossil fuels producer added that its board’s endorsement of Chevron’s offer remains in place at this time.
Despite the high value of CNOOC’s bid, industry onlookers believe that due to the advanced position of the original agreement and regulatory issues associated with the bid from the Chinese company, Chevron will still prevail.