On August 8, 2019, Anadarko Petroleum Corporation (APC) announced that it had entered into a definitive merger agreement with Occidental Petroleum Corporation (OXY). The merger was expected to create one of the largest energy companies in the world, with a market capitalization of approximately $100 billion.
Under the terms of the agreement, Occidental agreed to acquire all of Anadarko`s outstanding shares for a total consideration of $55 billion, which included the assumption of Anadarko`s debt. The deal was structured as a mix of cash and stock, with Anadarko shareholders receiving $59.00 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock.
The merger was initially challenged by Chevron Corporation, which had also expressed interest in acquiring Anadarko. Chevron made a counteroffer of $50 billion, but ultimately withdrew from the bidding war, citing the superior value of Occidental`s offer.
The merger was seen as a strategic move for both companies, as it would give Occidental access to Anadarko`s vast shale holdings in the Permian Basin, the largest oil-producing region in the United States. Anadarko had also been exploring opportunities in liquified natural gas (LNG) export, which would add to Occidental`s existing LNG operations.
The merger was completed on August 8, 2019, following approval from Anadarko`s shareholders and regulatory agencies. The new company, named Occidental Petroleum Corporation, became the largest producer in the Permian Basin and one of the top oil and gas producers in the world.
The merger agreement was a major event in the energy sector, and its impact will be felt for years to come. It is a prime example of the consolidation trend that has been taking place in the industry, as companies look to gain scale and diversify their operations in the face of volatile commodity prices and changing market conditions. As the energy landscape continues to evolve, it is likely that more mergers and acquisitions will take place, further shaping the future of the industry.
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