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The Anadarko acquisition takes another twist...



Just as Chevron seemed poised to acquire Anadarko Petroleum, smaller rival Occidental stepped into the arena with a substantial hostile bid, giving Anadarko’s board cause for consideration. Reports from Reuters, FT and others suggest that Anadarko’s board may indeed have been swayed by Occidental and could be prepared to endorse the proposal.
The Anadarko acquisition saga continues.
(Image via Anadarko Petroleum).

A statement direct from Anadarko says that the company 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’.

Nevertheless, the Chevron Merger Agreement remains in effect. So, it’ll be down to the forthcoming negotiations with Occidental to sway the deal. Oh, to be a fly on the wall!

So, what’s at stake here? The Occidental cash-and-stock bid values Anadarko at nearly $57 billion. That’s about 20% more than the takeover deal Anadarko already reached with Chevron. As we’ve written previously, the real prize up for grabs are Anadarko’s shale assets- which are seen by many industry commentators as America’s best. Should Occidental prove successful in its acquisition attempt, Anadarko’s Permian assets would life Occidental’s output in that shale oilfield to 533,000 barrels per day.

Regardless of which company eventually succeeds in acquiring Anadarko, the resulting new company would be a veritable behemoth (or an ‘ultramajor’ as we’ve taken to calling new mega oil companies here at EngineeringPro towers). The combined company would be worth approximately $100 billion and produce about 1.4 million barrels of oil per day.

So which company will prevail? Doubtless there will be numerous updates in the days ahead.

Have your say

Which company do you think makes the best buyer of Anadarko? Chevron or Occidental? Vote in this week’s EngineeringPro poll. The results (along with the best, most insightful comments) will be featured in next week’s EngineeringPro newsletter.
Tags: Oil & Gas
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The Anadarko acquisition takes another twist... - Time to read 2 min
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