Oxy, Anadarko merger moves to approvals phase

A deal to combine Anadarko Petroleum and Occidental Petroleum is moving to the approvals phase. Anadarko on May 9 entered into a definitive merger agreement with Oxy following the termination of its previously announced merger agreement with Chevron. Anadarko paid a termination fee of $1 billion to Chevron.

May 10th, 2019

A deal to combine Anadarko Petroleum Corp. and Occidental Petroleum Corp. is moving to the approvals phase. Anadarko on May 9 entered into a definitive merger agreement with Oxy following the termination of its previously announced merger agreement with Chevron Corp. (OGJ Online, May 9, 2019). Anadarko paid a termination fee of $1 billion to Chevron.

The deal by Oxy to acquire Anadarko, valued at $57 billion including the assumption of Anadarko’s debt, creates a more than $100-billion company with 1.3 million boe of production, Oxy said in a press statement.

“This transaction further establishes Occidental as a premier operator in prolific global oil and gas regions with the ability to deliver production growth of 5% through investment in projects with industry-leading returns,” said Vicki Hollub, Oxy president and chief executive officer.

Oxy expects to fund the cash portion of the consideration through a combination of cash and debt and equity financing, including proceeds from a $10 billion equity investment by Berkshire Hathaway Inc.

Closing, subject to customary conditions including Anadarko shareholder and regulatory approvals, is expected in this year’s second half, at which time “investors will begin focusing on Oxy’s progress achieving the stated $2 billion in yearly synergies and targeted $10-15 billion of divestitures,” said Capital One Securities Inc. analysts in a May 10 research note.

Oxy earlier this week outlined an $8.8-billion deal signed with Total SA to divest assets in Algeria, Ghana, Mozambique, and South Africa should its merger with Anadarko close (OGJ Online, May 6, 2019).

Glenn Vangolen, Oxy’s senior vice-president of business support, is expected to lead an integration team that will include representatives from both companies.

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