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Chevron to acquire Anadarko
Posted on Friday, 12 April 2019 14:32
In a move to enhance its upstream portfolio, Chevron is buying hydrocarbon exploration company Anadarko Petroleum, for USD 50.00 billion, including debt.

Under the terms of the transaction, the acquiror is offering USD 65.00 per share, comprising 0.39 scrips and USD 16.25 in cash, or 75.0 per cent in stock and 25.0 per cent in cash, for every one held in the target.

The proposal represents a premium of 38.9 per cent to the target’s close of USD 46.80 on 11th April, the last trading day prior to the announcement.

In total, Chevron will issue 200.00 million scrips, USD 8.00 billion in cash, and assume net debt of USD 15.00 billion.

According to Zephyr, the M&A database published by Bureau van Dijk, the transaction is the biggest deal targeting oil and gas extraction providers announced worldwide since the beginning of 2019 and the third-largest acquisition signed off globally in the year to date.

Another notable transaction saw PTT Exploration & Production, via its subsidiary PTTEP HK Offshore, agreeing to buy Murphy Sabah Oil and Murphy Sarawak Oil for USD 2.23 billion.

Headquartered in Texas, Anadarko develops, acquires and explores oil and natural gas resources and had 1.47 billion barrels of oil equivalent of proved reserves by the end of 2018.

It has operations worldwide including in the US, South Africa, the UK, Brazil and Algeria and posted sales revenue of USD 13.07 billion for the financial year ended 31st December 2018, up from USD 10.97 billion in the preceding 12 months.

Michael Wirth, chief executive of Chevron, said: “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.”

He added that the transaction is expected to generate annual synergies of around USD 2.00 billion and be accretive to free cash flow and earnings one year after closing.

Subject to the clearance from the target’s shareholders and the usual raft of closing conditions and regulatory approvals, the deal is slated to complete in the second half of 2019.

Based in California, Chevron is billed as one of the world’s leading integrated energy companies.

Its activities include the production and transportation of crude oil and natural gas, as well as the manufacturing and distribution of fuels and lubricants.

Chevron’s portfolio features projects in Mexico, Australia and Kazakhstan, among others and the group generated total earnings of USD 14.82 billion in the fiscal year ended 31st December 2018 (FY 2017: USD 9.20 billion).

© Zephus Ltd