ADVERTISEMENT

Anadarko Accepts Oxy's Revised Takeover Offer

Anadarko Petroleum's headquarters in The Woodlands, Texas. Source: Getty Images

Anadarko Petroleum has accepted Occidental Petroleum's revised takeover bid after Oxy during the weekend struck a deal to sell Anadarko’s Africa assets and then increased its cash offer for the independent.

Anadarko said 6 May that its board unanimously determined that Oxy's new offer is a "superior proposal" as defined in Anadarko's previously announced merger agreement with Chevron. Anadarko now plans to terminate the Chevron agreement. 

Houston-based Oxy announced 5 May that it had agreed—contingent on Anadarko agreeing to Oxy’s new bid and the deal eventually closing—to sell Anadarko’s assets in Algeria, Ghana, Mozambique, and South Africa to French major Total for $8.8 billion. The deal includes Anadarko’s stake and operatorship of the Mozambique LNG project.

Oxy is not involved in LNG, while Total has a large LNG business as well as extensive exploration and production activities in Africa. Proceeds from the sale would go toward the cash used to fund the Anadarko buy.

Oxy’s offer now consists of 78% cash compared with the previous 50-50 cash and stock proposal. The overall proposal remains $76/share, or $38 billion. Chevron’s $33-billion offer is 75% stock and 25% cash.

The sale of the Africa assets “fast-tracks” Oxy’s $10–15-billion divestiture plan for Anadarko assets it considers nonessential, the company said. Oxy’s primary motivation for acquiring Anadarko is the independent’s position in the Permian Basin in West Texas and southeastern New Mexico, where Oxy also holds a large position.

Oxy last week first advanced its cause to present a better deal to Anadarko by securing a $10-billion commitment from US businessman Warren Buffett’s Berkshire Hathaway conglomerate. The sale of preferred stock to Berkshire Hathaway comes with an 8% annual dividend.

This story was edited to include Anadarko's response to Oxy's revised offer.

Anadarko Accepts Oxy's Revised Takeover Offer

05 May 2019

ADVERTISEMENT


STAY CONNECTED

Don't miss out on the latest technology delivered to your email weekly.  Sign up for the JPT newsletter.  If you are not logged in, you will receive a confirmation email that you will need to click on to confirm you want to receive the newsletter.

 

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT