Chevron
said Monday it agreed to buy fellow oil company
Hess
in an all-stock deal valued at $53 billion. It’s another major deal in the energy sector as rising crude prices are set to boost profits.
Chevron
(ticker: CVX) said
Hess
(HES) shareholders would receive 1.025 Chevron shares in exchange for each of their own shares.
Hess shares were up 2.4% at $166.85 in premarket trading. Chevron shares were falling 2.7% at $162.40.
The deal values Hess shares at $171 each, based on Chevron’s closing price on Friday. The deal is valued at $53 billion, or $60 billion when including debt.
The acquisition is the latest sign of consolidation in the oil-and-gas industry. Earlier this month, Exxon Mobil (XOM) confirmed a deal to buy Pioneer Natural Resources (PXD) for $64.5 billion, including debt, in an all-stock transaction.
Hess has projects in the U.S. and overseas, including a 30% stake in a consortium focused on offshore projects in Guyana, where it works with
Exxon Mobil.
Chevron said that alongside the deal it expects to recommend an 8% increase to its first-quarter dividend per share to $1.63. It also intends to increase share repurchases by $2.5 billion to the top end of its guidance range of $20 billion a year, if oil prices remain strong.
“Building on our track record of successful transactions, the addition of Hess is expected to extend further Chevron’s free cash flow growth,” said Chevron Chief Finacial Officer Pierre Breber.
The deal has been approved by the boards of both companies and is expected to close in the first half of 2024.
Write to Adam Clark at adam.clark@barrons.com
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