In the first major U.S. oil deal since the pandemic hit the industry. Supermajor Chevron announced on Monday that lit had entered into a definitive agreement. It is to buy Houston-based Noble Energy in an all-stock transaction valued at US$5 billion.
Under the terms of the deal, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total enterprise value of the transaction is US$13 billion, including debt, Chevron said.
The rationale for the deal is a low-cost acquisition of quality Energy. It is proving reserves that will fit strategically into Chevron’s plans in the U.S. shale patch and abroad.
Chevron and Noble Energy’s boards have unanimously approved the deal. They are expecting to close in Q4 2020. It is subject to shareholder approval of Noble Energy shareholders, regulatory approvals, and other customary closing conditions.
Last year, Chevron bid to buy Anadarko. Moreover, there is an outbid by Occidental in what analysts now see as an ill-timed decision for Oxy to pursue such a huge and leveraged transaction.
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Source: Oil Price
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