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Occidental Petroleum has just completed one of the largest oil mergers and acquisitions (M&A) of the past few years, buying Anadarko Petroleum and assuming its debt in a transaction valued at a total of US$55 billion.
At a special meeting held on Thursday, Anadarko’s shareholders overwhelmingly voted in favor of the company to be acquired by Occidental, with more than 99 percent of Anadarko’s shares voting for the takeover, Oxy said in a statement, adding that it has now successfully completed the transaction.
In the deal, Anadarko’s shareholders will be getting US$59.00 in cash and 0.2934 shares of Occidental’s common stock per share of Anadarko common stock. After the end of trading on Thursday, Anadarko’s common stock will cease to be traded on the New York Stock Exchange, Oxy said.
This spring, Occidental outbid Chevron to seal one of the largest oil and gas M&A deals of the past few years. Occidental offered US$38 billion for Anadarko, 80 percent of it in cash, in addition to the assumption of Anadarko’s debt. Initially, Oxy had offered 50 percent of the US$57-billion debt-including price in cash and the rest in stock, but Anadarko was reluctant to accept this bid. Oxy then upped the cash portion of the deal to 80 percent and won the approval of Anadarko’s board.
“With Anadarko’s world-class asset portfolio now officially part of Occidental, we begin our work to integrate our two companies and unlock the significant value of this combination for shareholders,” Occidental’s President and Chief Executive Officer Vicki Hollub said.
Occidental, however, will be taking on a lot of debt in this transaction, analysts and experts warn.
Analysts are already speculating about which Anadarko assets Occidental could divest to cut part of the debt it has taken on from the deal and to focus on the core assets after the transaction—Anadarko’s prime U.S. shale acreage.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.