US energy giant Chevron announced on 12 April that it has entered into a definitive agreement with Anadarko Petroleum Corporation to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65 per share. The total enterprise value of the transaction is $50 billion.
The acquisition of US hydrocarbon exploration company Anadarko will significantly enhance Chevron’s upstream portfolio and strengthen its positions in large, attractive shale, deepwater and natural gas resource basins.
“This transaction builds strength on strength for Chevron,” Chevron’s Chairman and CEO Michael Wirth 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 LNG business. It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short-cycle, higher-return investments,” he said, adding that this transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion and will be accretive to free cash flow and earnings one year after close.
Anadarko Chairman and CEO Al Walker said the strategic combination of Chevron and Anadarko would form a stronger and better company with world-class assets, people and opportunities.
According to Chevron, the combination of the two companies will create a 75-mile-wide corridor across the most attractive acreage in the Delaware basin, extending Chevron’s position as a producer in the Permian.
Moreover, the acquisition will enhance Chevron’s existing high-margin position in the deepwater Gulf of Mexico (GOM), where it is already a leading producer, and extend its deepwater infrastructure network.
Another advantage of the acquisition is in the field of liquefied natural gas (LNG), Chevron said. Chevron will gain another world-class resource base in Mozambique to support growing LNG demand, Chevron said, adding that area 1 is a very cost-competitive and well-prepared greenfield project close to major markets.