Chevron to buy Anadarko in $33B mega deal

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Houston Chronicle by Jordan Blum 4/12/2019

The California oil major Chevron said Friday it would buy Anadarko Petroleum for $33 billion in the biggest industry deal in four years, strengthening Chevron’s leading positions in the booming Permian Basin, the deepwater Gulf of Mexico and the Houston energy workforce.

The deal would create a class of “ultra major” energy companies and potentially trigger a buying spree among other Big Oil companies, including Exxon Mobil and Royal Dutch Shell, industry analysts said. There’s also a smaller chance those companies and others could seek to outbid Chevron for Anadarko, which reportedly turned down a larger offer from Houston’s Occidental Petroleum before agreeing to a Chevron deal that seemed a better fit.

Chevron said it would pay a nearly 40 percent premium to acquire The Woodlands oil and gas company, offering $65 per share in a cash-and-stock deal that would inevitably mean layoffs in the Houston area, although it’s uncertain how many. Chevron Chief Executive Michael Wirth said Chevron would cut $1 billion from the combined companies’ capital spending and save another $1 billion in cost cuts and personnel reductions.

In an interview, Wirth downplayed any major layoffs. Anadarko employs about 2,000 workers in The Woodlands and Chevron about 7,000 in the Houston region.

“We’re not intending to make any changes on real estate and that kind of thing,” Wirth said, assuring that Chevron would maintain hubs in both downtown Houston and The Woodlands for the foreseeable future. “One of the great opportunities when you combine two really good companies with great people is to create an even better workforce than ever before.”

More: https://www.houstonchronicle.com/business/article/CHEVRON-ANADARKO-13763077.php

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In years past, Chevron used to be known as the Great Explorer, finding the big deposits of oil in Saudi Arabia and Indonesia.

In recent decades, it is known as the Great Acquirer, as it has gobbled up companies such as Texaco, Gulf, Unocal, mostly for the international assets of those companies.

Then it went after Atlas, and now Anadarko, for the domestic assets of those companies.

Its track record will come to naught should it decide to remain in California, the bastion of ill will toward oil companies.