Chevron Agrees to $5 Billion Buyout of Noble Energy in All-stock Deal

Chevron Corp. agreed on July 20 to a buyout of Houston-based independent E&P company Noble Energy Inc. in an all-stock transaction valued at $5 billion.

The San Ramon, Calif.-based oil major said in a statement the acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources to enhance an “already advantaged upstream portfolio.”

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth.

Founded more than 85 years ago, Noble Energy today operates a portfolio of U.S. shale assets, including in the prolific Permian Basin, plus international assets offshore Israel in the Eastern Mediterranean Sea.

“These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline,” Wirth continued in his statement.

The total enterprise value, including debt, of the transaction is $13 billion.

The acquisition consideration is structured with 100% stock. Upon closing, Chevron will issue approximately 58 million shares of stock.

Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share and are expected to own approximately 3% of the combined company.

The transaction price represents a premium of nearly 12% on a 10-day average based on closing stock prices on July 17, according to the Chevron release.

Credit Suisse Securities (USA) LLC is financial adviser to Chevron for the transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as the company’s legal adviser. Meanwhile, J.P. Morgan Securities LLC is financial adviser to Noble Energy with Vinson & Elkins LLP acting as its legal adviser.

Source: hartenergy.com

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