One of the largest energy acquisitions is poised to take place soon as two NYSE-traded petroleum companies are considering a merger.
Texas-based Anadarko Petroleum (NYSE: APC) is apparently on course to agree to a $55 billion takeover offer from it’s U.S. rival Occidental Petroleum (NYSE: OXY), having said on Monday that its board had “unanimously determined” that the latest cash-and-stock offer from it’s rival would be a superior arrangement to some of the other offers on the table.
“Anadarko is resuming its earlier negotiations with Occidental because Anadarko’s board of directors, following consultation with its financial and legal advisors, has unanimously determined that the Occidental Proposal could reasonably be expected to result in a “Superior Proposal” as defined in the Chevron Merger Agreement. The Occidental Proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko,” said the company in a press release.
Hostile bids are usually unsuccessful, and should Anadarko accept this offer, it would be a rare win for these types of takeover attempts.
Just last week, the company confirmed it had received a new unsolicited offer from Occidental just weeks after they had turned down another advance from the petroleum giant.
Occidental is one of the top five largest U.S. oil and gas companies and offered to pay around $76 per share, or a 22 percent premium, to Anadarko shareholders in comparison to a rival bid from Chevron, who offered around $63 per share instead.
Occidentals bid was evenly split between cash and stock. Additionally, Anadarko agreed to pay Chevron (NYSE: CVX) $1 billion should the company back out of the deal.
At this point, it’s unclear whether Chevron will increase its offer to compete with Occidental. However, some sources have gone on to say that a bidding war between the two energy companies seems unlikely according to The Financial Times.
Chevron previously said on Monday that it was standing by its previous deal, saying that “We believe our signed agreement with Anadarko provides the best value and the most certainty to Anadarko’s shareholders.”
The CEO of Occidental also promised that it would sell assets worth up to $15 billion should the deal come together. “This is much more synergistic for us than any other company that might look at this,” said Vicki Hollub, Occidental’s chief executive.
Time will tell whether or not this mega-merger will take place and whether Occidental will indeed triumph over it’s larger rival Chevron in acquiring this company.
Anadarko Petroleum Company Profile
Anadarko Petroleum, based in The Woodlands, Texas, is one of the largest independent exploration and production companies in North America.
Its asset base includes conventional and unconventional properties in the U.S. and deepwater oil and gas projects in the Gulf of Mexico and Africa. At the end of 2018, proven reserves totaled 1.47 billion boe, with net production of 666 mboe/d. – Warrior Trading News
Occidental Petroleum Company Profile
Occidental Petroleum is an independent exploration and production company with operations in the United States, Latin America, and the Middle East. At the end of 2018, the company reported net proven reserves of 2.8 billion barrels of oil equivalent.
Net production averaged 658 thousand barrels of oil equivalent per day in 2018, at a ratio of 77% oil and natural gas liquids and 23% natural gas. – Warrior Trading News