Chevron Corporation and Hess Corporation have entered into a definitive agreement for Chevron to acquire Hess’s worldwide operations for $53 billion in cash and stock. Under the agreement, Hess shareholders will receive $72.00 per share, comprised of $47.44 per share in cash and 0.59 share of Chevron for each Hess share.
The transaction looks to capitalize on two major components of the Hess business portfolio, including deepwater operations and shale assets. Deepwater resources account for almost 25 percent of Hess’s global production and the combined holdings in North America’s most prolific shale plays will account for an additional 8 percent.
The transaction comes amid a period of uncertainty in the oil markets caused by the global pandemic. As crude prices dropped to its lowest rates in two decades, Hess’s share prices declined significantly. The acquisition offered a timely opportunity for Hess shareholders to benefit from a more attractive price for their assets.
Chevron and Hess will now join forces to become one of the largest integrated energy companies in the world. The deal is expected to be finalized by the second half of 2020, pending approval by Hess shareholders and regulators.
