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Chevron to buy Anadarko for $33 billion

12/04/2019
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US supermajor Chevron has reached an agreement to buy smaller rival Anadarko Petroleum Corp for $33 billion in cash and stock as Chevron seeks to strengthen its position in the Permian basin and bolster its LNG operations.
Chevron is set to acquire Anadarko Petroleum for $33 billion
(Image via Wikimedia Commons).

The acquisition of Anadarko will significantly enhance Chevron’s already strong upstream portfolio and further strength its positions in large, attractive shale, deepwater and natural gas resource basins.

“This transaction builds strength on strength for Chevron,” said Chevron’s Chairman and CEO Michael Wirth. “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”.

“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,” Wirth concluded.

The transaction will bring Anadarko assets under Chevron’s control which are a ‘strong and strategic fit’ according to a statement from the company:

  • Shale & Tight- 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 leading position as a producer in the Permian.

  • Deepwater- The combination will enhance Chevron’s existing high-margin position in the Gulf of Mexico, where it is already a leading producer, and extend its deepwater infrastructure network.

  • LNG- Chevron will gain another world-class resource base in Mozambique to support growing LNG demand. Area 1 is a very cost-competitive and well-prepared greenfield project close to major markets.

  • Commenting on the deal, Al Walker, Anadarko Chairman and CEO said:

    “The strategic combination of Chevron and Anadarko will form a stronger and better company with world-class assets, people and opportunities. I have tremendous respect for Mike and his leadership team and believe Chevron’s strategy, scale and operational capabilities will further accelerate the value of Anadarko’s assets”.

    The transaction has been approved by the Boards of Directors of both companies and is expected to close in the second half of the year. Upon closing, the Company will continue to be led by Michael Wirth as Chairman and CEO. Chevron will remain headquarted in San Ramon, California.

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