Countering an earlier bid made by Chevron Corp. (CVX, Financial), Occidental Petroleum Corp. (OXY, Financial) offered to buy oil and gas driller Anadarko Petroleum Corp. (APC, Financial) for $76 per share on Wednesday.
The 50-50 cash-and-stock offer, which consists of $38 in cash and 0.6094 shares of Occidental per share owned, values The Woodlands, Texas-based company at $57 billion, including debt, and is a 20% premium to Chevron’s bid.
On April 12, the San Ramon, California-based integrated oil and gas company announced it was buying Anadarko for $33 billion in cash and stock, valuing it at $65 per share. According to the terms of the agreement, shareholders will receive $16.25 in cash and 0.3869 shares of Chevron for each Anadarko share owned.
The Houston-based oil and gas producer said the combination with Anadarko is expected to create a global energy leader with enough scale and diversification to drive growth and deliver value to shareholders of both companies.
In a statement, Occidental President and CEO Vicki Hollub said Anadarko’s assets would also benefit from the company’s expertise in enhancing performance and productivity.
“Occidental and Anadarko have a highly complementary asset portfolio, providing us with a unique opportunity to realize significant operating, cost, and capital allocation synergies and achieve near-term cash flow accretion,” she said. “We have been focused on Anadarko for several years because we have long believed that we are ideally positioned to generate compelling value from a combination with them.”
Following the announcement, shares of Occidental were down 2.65% at $60.73, while Anadarko’s shares surged 12% to $71.67. Shares of Chevron were also 2% lower at $119.56. Year to date, GuruFocus data shows Occidental’s stock has lost 1%, while Chevron has gained 10% and Anadarko has climbed 63%.
The industry overview page shows Occidental and Anadarko are the third and fourth-largest companies in the oil and gas exploration and production sector, behind ConocoPhillips (COP, Financial) and EOG Resources Inc. (EOG, Financial).
Behind Exxon Mobil Corp. (XOM, Financial), the industry overview page shows Chevron is the second-largest company in the integrated oil and gas sector.
Disclosure: No positions.
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