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Occidental starts bidding war against Chevron with $38 billion offer for Anadarko



Occidental Petroleum has made a $38 billion bid for Anadarko Petroleum - eclipsing Chevron’s $33 billion agreement from two weeks ago.

(Image via Occidental Petroleum)

The Houston based company are offering $76/share in cash and stock, a premium of around 20% over Chevron’s offer. 

Occidental CEO Vicki Hollub said in a letter to Anadarko’s board of directors that the company had made three bids since late March, with the company having completed its due diligence on the deal and having financing lined up with Bank of America, Merrill Lynch and Citigroup. 

Like Chevron, the group are seeking to take over Anadarko’s significant assets in the fast growing Permian Basin in West Texas and New Mexico. 

If the deal were to go through it would make Occidental the largest producer in the Permian shale basin, and the 21st largest producer of oil and gas globally, surpassing ConocoPhillips.

Chevron have not yet commented on the counteroffer and it is not yet clear if they will engage in the bidding war. 

Despite the higher bid, Anadarko may still wish to go with the original offer by Chevron since Occidental’s smaller size and balance sheet may cause more uncertainty over the prospects of completing a deal. There are also questions over how Occidental might fund Anadarko’s giant liquefied natural gas plant being developed in Mozambique - which may have to be sold.

Anadarko have not yet commented.

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Occidental starts bidding war against Chevron with $38 billion offer for Anadarko - Time to read 2 min
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