Chevron Corporation has announced that it has entered into a definitive agreement with Hess Corporation to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion (€50 billion), or $171 (€161) per share based on Chevron’s closing price on October 20, 2023.
Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The total enterprise value, including debt, of the transaction is $60 billion (€56 billion).
The acquisition of Hess upgrades and diversifies Chevron’s already advantaged portfolio.
Some of the transaction benefits include:
- Strong strategic fit
- Guyana – 30% ownership
- Bakken – 465,000 net acres of high-quality, long-duration inventory
- Complementary Gulf of Mexico assets and steady free cash flow from Southeast Asia natural gas business
- Accretive to cash flow per share and extends growth into 2030s
- Expected to be accretive to cash flow per share in 2025
- Increases Chevron’s estimated five-year production and free cash flow growth rates and expected to extend such growth into the next decade
- Increases cash returned to shareholders
Chevron chairman and CEO, Mike Wirth says: ‘This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets. Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.’
Hess CEO, John Hess says: ‘I am proud of our people and what we have achieved as a company, which has one of the industry’s best growth portfolios including Guyana, the world’s largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer. Chevron has a world-class diversified portfolio…I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.’
