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Chevron bows out of the battle for Anadarko



So, it’s official. The battle for Anadarko is seemingly over. Chevron has announced that it will not increase upon its offer to acquire Anadarko and will bow out of the battle leaving Occidental as the sole contender to acquire the US-based E&P company.
Anadarko's shale acreage has proved to be a central prize within the bidding war between Chevron and Occidental
(Anadarko’s shale acreage has proved to be a central prize within the bidding war between Chevron and Occidental. Image via Anadarko Petroleum).

Following Anadarko’s board embracing the Occidental proposal as superior on 6th May, Chevron had up to four days to come back with a revised offer. However, Chevron CEO Mike Wirth made the decision that an attempt to top Occidental’s offer was too risky.

“Winning in any environment doesn’t mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal,” said Chevron’s Chairman and CEO Michael Wirth in a statement. “Our advantaged portfolio is driving robust production and cash flow growth, higher investment returns and lower execution risk. We are well positioned to deliver superior value creation for our shareholders”.

With Chevron bowing out of the battle Occidental will now be free to proceed with its $38 billion takeover of Anadarko which will double the acquirer’s daily output to more than 1.3 MMbopd.

Chevron doesn’t walk away empty-handed though. Upon termination of the Merger Agreement, Anadarko will be required to pay Chevron a termination fee of $1 billion.

Despite the bidding war only lasting a month, it has involved a considerable amount of twists and turns including famed-investor Warren Buffett ploughing $10 billion into Occidental’s deal.

All eyes will now be on Occidental to see how they conclude the acquisition…

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Tags: Oil & Gas
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Chevron bows out of the battle for Anadarko - Time to read 2 min
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