Chevron (NYSE: CVE) on Friday announced plans to acquire oil and gas exploration and production company Anadarko Petroleum (NYSE:APC) in a cash-and-stock deal valued at $33 billion. The transaction will give the second biggest U.S. energy company a boost in shale oil production as well as natural gas.
The deal values Anadarko at $65 per share, representing a 37% premium to its Thursday close. Based on Chevron’s closing price of $46.80 on April 11, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share. Chevron will assume $15 billion of Anadarko’s debt.
"This takes a great company and makes it even better," Chevron’s Chairman and CEO Michael Wirth told the media soon after the news broke. “As our company has strengthened its financial situation over recent years, we’re always looking to make our portfolio even stronger."
Wirth sees $65 per share as a "fair price" for the oil and gas producer.
The deal, which is subject to shareholder and regulatory approval, is expected to close in the second half of 2019. If approved, Chevron said it plans to boost its annual share buyback program to $5 billion from $4 billion.
Chevron said it plans to divest $15 billion to $20 billion of assets between 2020 and 2022.
Following the news, Chevron shares were up 10 cents, or 1% from Thursday’s close to $9.96, while shares in Anadarko rocketed $15.15, or 32.4%, to $61.95
