Based on Chevron’s closing price on 11 April 2019, and under the terms of the agreement, Anadarko shareholders will reportedly receive 0.3869 shares of Chevron and US$16.25 in cash for each Anadarko share. According to the statement, the total enterprise value of the transaction is US$50 billion.
Chevron claims that the acquisition will improve its upstream portfolio and strengthen its position in large, attractive share, deepwater and natural gas resource basins. Furthermore, Western Midstream Partners LP is a successful midstream company whose assets are well aligned with the combined companies’ upstream positions, which should further enhance their economics and execution capabilities.
Michael Wirth, Chairman and CEO of Chevron, said: “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 US$2 billion, and will be accretive to free cash flow and earnings one year after close.”
Anadarko Chairman and CEO Al Walker added: “The strategic combination of Chevron and Anadarko will form a stronger and better company with world-class assets, people and opportunities.
“I have tremendous respect for Mike and his leadership team and believe Chevron’s strategy, scale and operational capabilities will further accelerate the value of Anadarko’s assets.”