In yet another megadeal for the US energy sector, Chevron Corporation announced it would purchase Hess Corporation in an all-stock deal valued at $53 billion.
According to a statement from both companies, Chevron will pay $171 per share for Hess in the all-stock transaction. Hess shareholders will receive 1.025 shares of Chevron for each Hess share, giving the company a total enterprise value of $60 billion, including debt. The $171 a share is a 10% premium versus Friday’s close.
“The acquisition of Hess upgrades and diversifies Chevron’s already advantaged portfolio,” Chevron wrote in a statement, adding the deal will be a big boost to its operations:
- The Stabroek block in Guyana is an extraordinary asset with industry-leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade.
- Hess’ Bakken assets add another leading US shale position to Chevron’s DJ and Permian basin operations and further strengthen domestic energy security.
- The combined company is expected to grow production and free cash flow faster and for longer than Chevron’s current five-year guidance.
This is the second megadeal in the US oil/gas sector this month: Exxon Mobil Corp. agreed to buy Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing stock price on Oct. 5. Its Exxon’s largest takeover in more than two decades will make it a dominant producer of shale oil – as well as being extraordinary transformational for the US energy sector that might unleash another shale revolution.
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