Chevron Walks Away From Anadarko Deal -- Update
May 09 2019 - 8:15AM
Dow Jones News
By Colin Kellaher
Chevron Corp. (CVX) Thursday said it won't increase its $33
billion offer to buy Anadarko Petroleum Corp. (APC), ceding the
takeover target to Occidental Petroleum Corp. (OXY).
The San Ramon, Calif., energy giant said it will instead take
the $1 billion termination fee it is due from Anadarko and increase
its share repurchase rate by 25% to $5 billion a year.
"Winning in any environment doesn't mean winning at any cost,"
said Michael Wirth, Chevron's chairman and chief executive. "Cost
and capital discipline always matter, and we will not dilute our
returns or erode value for our shareholders for the sake of doing a
deal."
Anadarko earlier this week said Occidental's $38 billion bid was
superior to its deal with Chevron, which was given four business
days to make another offer.
Chevron said it will allow the match period to expire, adding
that it expects Anadarko will terminate the merger agreement.
Chevron in mid-April agreed to buy Anadarko in a $33 billion
cash-and-stock deal that would have placed it just behind Exxon
Mobil Corp. (XOM) as one of the world's largest publicly traded
producers of oil and gas.
But Occidental countered with a $38 billion offer backed by
billionaire investor Warren Buffett's Berkshire Hathaway Inc. (BRKA
BRKB).
"Our advantaged portfolio is driving robust production and cash
flow growth, higher investment returns and lower execution risk,"
Mr. Wirth said. "We are well positioned to deliver superior value
creation for our shareholders."
Shares of Chevron rose 3.3% in premarket trading Thursday.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
May 09, 2019 09:00 ET (13:00 GMT)
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