October 27, 2023: Chevron Corporation (CVX) announced today that it has agreed to acquire Hess Corporation (HES) in an all-stock deal valued at $53 billion. The deal, which is expected to close in early 2024, will create one of the largest oil and gas companies in the world.
Under the terms of the deal, Hess shareholders will receive 1.025 shares of Chevron common stock for each Hess share they own. The transaction represents a premium of about 4.9% to Hess’s closing price on October 26, 2023.
The acquisition will give Chevron a significant boost in its production of oil and gas, as well as its reserves. Hess has a strong presence in the Bakken shale formation in North Dakota, as well as in the Gulf of Mexico. Chevron also gains a stake in Exxon Mobil’s Stabroek oil block in Guyana, which is one of the most promising new oil discoveries in the world.
Chevron CEO Michael Wirth said the deal is “a great fit” for both companies and will create a “stronger, more competitive company.” He added that the deal will “generate significant value for our shareholders.”
Hess CEO John Hess said the deal is “in the best interests of our shareholders, employees, and communities.” He added that the deal will “create a new energy leader well-positioned to meet the world’s growing energy needs.”
The deal is expected to generate about $1 billion in annual cost savings for Chevron. The company also expects to increase its production by about 10% following the deal’s completion.
The acquisition is the latest in a series of consolidation deals in the oil and gas industry. Earlier this year, Exxon Mobil announced that it would acquire Pioneer Natural Resources for $60 billion. The deals are seen as a way for oil companies to reduce costs and improve efficiency.
Here are some additional details about the deal: