American multinational energy corporation, Chevron has entered into a definitive agreement with Anadarko Petroleum to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65/share. Under the terms of the agreement, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.
The acquisition consideration is structured as 75 percent stock and 25 percent cash. Chevron will issue 200-million shares, pay $8-billion in cash and will assume about $15-billion of net debt.
The move will significantly enhance Chevron’s upstream portfolio and further strengthen its leading positions in large, attractive shale, deepwater and natural gas resource basins. Chevron also expects the deal to add to free cash flow and earnings per share as well as boost the company’s share repurchase rate by $1-billion to $5-billion a year upon closing of the deal.
According to Chevron chairperson and Chief Executive, Michael Wirth,
“This transaction builds strength on strength for Chevron. The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our liquefied natural gas business. It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short-cycle, higher-return investments.”
Anadarko’s Chairman and CEO, Al Walker stated that he has “tremendous respect for Mike and his leadership team and believe Chevron’s strategy, scale and operational capabilities will further accelerate the value of Anadarko’s assets.”
Anadarko is the largest foreign oil producer in Algeria and in 2018, the Texas headquartered company celebrated 20 years of oil production in Algeria. The company also operates in Ghana, Mozambique and South Africa.