Chevron to Acquire Anadarko, Enhancing Its Upstream Portfolio

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Chevron to Acquire Anadarko, Enhancing Its Upstream Portfolio

Logos for Chevron Corp. and Anadarko Petroleum Corp.
The deal has a total enterprise value of $50 billion.

SAN RAMON, Calif. — Chevron Corp. reached a definitive agreement to acquire all of the outstanding shares of Anadarko Petroleum Corp. The deal is valued at $33 billion and has a total enterprise value of $50 billion.

According to Chevron, the acquisition of Anadarko will significantly enhance its upstream portfolio and "further strengthen its leading positions in large, attractive shale, deepwater and natural gas resource basins."

The agreement includes Western Midstream Partners LP, a master limited partnership formed by Houston-based Anadarko to acquire, own, develop and operate midstream assets. 

"This transaction builds strength on strength for Chevron," said Chevron Chairman and CEO Michael Wirth. "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 [liquefied natural gas] 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."

According to Wirth, the transaction will generate anticipated annual run-rate synergies of approximately $2 billion.

"The strategic combination of Chevron and Anadarko will form a stronger and better company with world-class assets, people and opportunities," said Anadarko Chairman and CEO Al Walker. "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."

The acquisition consideration is structured as 75 percent stock and 25 percent cash, providing an overall value of $65 per share based on the closing price of Chevron stock on April 11. In aggregate, upon closing of the transaction, Chevron will issue approximately 200 million shares of stock and pay approximately $8 billion in cash.

Chevron will also assume estimated net debt of $15 billion. Total enterprise value of $50 billion includes the assumption of net debt and book value of non-controlling interest.

Both companies' boards of directors approved the deal, which is expected to close in the second half of the year. The acquisition is subject to Anadarko shareholder approval, and regulatory approvals and other customary closing conditions.

Upon closing, the company will continue be led by Wirth as chairman and CEO. Chevron will remain headquartered in San Ramon.

Credit Suisse Securities (USA) LLC is acting as financial advisor to Chevron. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Chevron.

Evercore and Goldman Sachs & Co. LLC are acting as financial advisors to Anadarko. Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are acting as legal advisors to Anadarko.