Anadarko is one of the world’s largest independent oil and natural gas exploration and production companies, with 1.47 billion BOE of proved reserves. The deal is structured as 75% stock and 25% cash. Upon closing of the transaction, which is expected in the second half of this year, Chevron will issue about 200 million shares of stock and pay about $8 billion in cash to Anadarko shareholders. Chevron will also assume estimated net debt of $15 billion. Including this debt and the book value of non-controlling interest, the total enteprise value of the deal is about $50 billion.
Shares of APC are changing hands at $62.00 at 9:00am ET in pre-market trading, up 32.5% from Thursday’s close, while CVX shares are down 4% to $120.99.
This transaction builds strength on strength for Chevron. 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.
– Michael Wirth, Chairman and CEO, Chevron.