U.S. oil major Chevron (CVX) is buying rival Hess Corp. (HES) for $53 billion U.S. in an all-stock deal.
Chevron is offering $171 U.S. for each share of Hess, which is 5% higher than the current price of Hess stock.
The acquisition is valued at a total of $60 billion U.S., including some Hess debt that Chevron has agreed to take on.
John Hess, the chief executive officer (CEO) of Hess Corp., will join Chevron’s board of directors once the deal is finalized, said the two companies in a written statement.
Chevron and Hess have complimentary businesses. Each company is an oil and natural gas explorer and producer.
The deal for Chevron to takeover Hess comes only a few weeks after Exxon Mobil (XOM) offered $60 billion U.S. to acquire Pioneer Natural Resources (PXD), a combination that will create the biggest oil producer in the U.S.
Consolidation in the oil industry comes as crude prices are rising. Brent crude oil, the international standard, is now trading at $92 U.S. per barrel, up from less than $75 U.S. a barrel at the start of the summer.
Chevron’s stock has declined 4% this year, while the share price of Hess has risen 21% since January.
Chevron’s takeover of Hess is subject to regulatory approval. A closing date for the acquisition has not been announced.
