$53B Hess – Chevron Deal Wins Shareholder Approval
Hess shareholders approved the company’s takeover by oil behemoth Chevron. The $53 billion acquisition is likely to provide Chevron with access to a major oil development, potentially significantly expanding its asset base.
A majority of outstanding Hess shares voted in favor of the merger agreement, though the company did not immediately provide a tally of the vote.
“We are very pleased that the majority of our stockholders recognize the compelling value of this strategic transaction and look forward to the successful completion of our merger with Chevron,” CEO John Hess said. “Together we will be positioned as a premier integrated energy company, with the leadership, asset portfolio and financial resources to deliver significant shareholder value for years to come.”
The approval comes amid controversy surrounding the vote, with some shareholders and proxy service ISS recommending that holders abstain, citing the deal’s valuation and uncertainty about the timeline of the arbitration case between Chevron and Exxon Mobil over its rights to the Stabroek Block, a hugely valuable oilfield off the coast of Guyana.
Rival proxy service Glass Lewis earlier this month recommended that Hess shareholders vote in favor of the transaction.
Exxon filed an arbitration complaint against Hess’ proposed sale to Chevron, alleging it had the right of first refusal to purchase Hess’ part in the block. Chevron and Hess disagree with the assertion.
Hess owns 30% of the Stabroek Block, while Exxon controls 45%. China National Offshore Oil Corporation owns the remaining 25%.
Chevron was enthusiastic about the transaction when it launched its takeover bid in October.
“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” Chevron CEO Mike Wirth said at the time.
The transaction still needs clearance from the Federal Trade Commission, but investors were more confident when Exxon received approval for its $60 billion acquisition of Pioneer Natural Resources earlier this month.
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