New’macro operation’ in the US oil sector. Chevron announced the acquisition of its competitor, Hess, for 53 billion dollars (almost 50 billion euros).
The agreement comes just two weeks after oil company Exxon Mobil announced the purchase of fracking giant Pioneer Natural Resources (PNR) for more than 60 billion euros. Both transactions represent the company’s medium- and long-term commitment to conventional hydrocarbons.
Chevron acquired all of Hess’ outstanding shares in a transaction valued at $171 per share, based on the oil company’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1,250 Chevron shares for each Hess share. The total enterprise value, including debt, of the transaction is $60 billion (about $57 billion).
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the first half of 2024. The acquisition is subject to the approval of Hess shareholders, as well as regulatory approvals and other conditions of approval.
According to Chevron, the acquisition of Hess will allow it to develop and diversify its portfolio. “Importantly, our two companies share the same values and culture, focusing on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities, and delivering higher returns and lower carbon emissions,” said Chevron Chairman and CEO Mike Wirth.
“Leveraging our track record of successful transactions, the addition of Hess is expected to further improve Chevron’s free cash flow,” said Pierre Breber, Chevron’s chief financial officer. “With greater confidence in expected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and greater share buybacks.”