Chevron Acquisition of Anadarko

Chevron Corp. (NYSE: CVX) has agreed to buy Anadarko Petroleum Corp. (NYSE: APC) for approximately $33 billion ($65/share) in a cash-and-stock deal. The acquisition of Anadarko will enhance Chevron’s upstream portfolio and strengthen its positions in shale, deepwater, and gas resource basins.

According to an Anadarko news release, Chevron will acquire all outstanding shares of the company and current Anadarko shareholders will receive 0.3869 shares of Chevron plus $16.25 in cash per share of Anadarko.

Chevron CEO and Chairman Mike Wirth stated that:

 “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.”

Source: Anadarko

Once the transaction is complete, Chevron will remain headquartered in San Ramon, California and led by Wirth. While the transaction has been approved by both companies’ Boards of Directors, it is still pending approval of Anadarko shareholders, regulatory approvals, and other standard closing conditions.

According to a statement by Chevron, the acquisition of Andarko includes:

  • A strategic fit to enhance Chevron’s advantaged portfolio.
  • $2 billion in anticipated annual operating costs and capital synergies.
  • Accretive to free cash flow and earnings one year after close.
  • Share repurchase annual target increases by 25 percent to $5 billion.

The last energy company transaction of this magnitude happened in 2016, when Royal Dutch Shell purchased BG Group PLC for $53 billion.

Anadarko has been a member company of Pink Petro since 2018. “Acquisitions are done to drive shareholder value. We have to remember though that people and culture are critical to making these deals work. It’s a big opportunity and I’m eager to see what this will do for our industry” says Katie Mehnert, CEO of Experience Energy and Pink Petro.

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