Creates a $100+ Billion Global Energy Leader
with 1.3 Million Boe/d of Production to Drive Significant Value and
Returns for Occidental and Anadarko Shareholders
Expected to Be Accretive to Cash Flow and Free
Cash Flow Year-One, and Deliver $3.5 Billion of Free Cash Flow
Improvement through $2.0 Billion of Annual Cost Synergies and $1.5
Billion of Annual Capital Reductions
Occidental Petroleum Corporation (“Occidental” or “the Company”)
(NYSE: OXY) today entered into a definitive agreement whereby
Occidental will acquire Anadarko Petroleum Corporation (“Anadarko”)
(NYSE: APC) for $59.00 in cash and 0.2934 shares of Occidental
common stock per share of Anadarko common stock, in a transaction
valued at $57 billion, including the assumption of Anadarko’s
debt.
“This exciting transaction will create a global energy leader
with a world-class portfolio, proven operational capabilities and
industry leading free cash flow metrics,” said Vicki Hollub,
President and Chief Executive Officer of Occidental. “This
transaction further establishes Occidental as a premier operator in
prolific global oil and gas regions with the ability to deliver
production growth of 5% through investment in projects with
industry-leading returns. With greater scale, an unwavering focus
on driving profitable growth, and our commitment to growing our
dividend, we are creating a unique platform to drive meaningful
shareholder value.”
The transaction provides compelling strategic and financial
rationale for all stakeholders as it:
- Applies Occidental’s proven operational
and technical excellence to Anadarko’s portfolio;
- Enhances Permian leadership position of
Occidental and bolsters portfolio with additional free cash flow
generating assets;
- Creates a global energy leader with
enhanced scale and expertise to lead energy into a low carbon
future;
- Provides expected accretion year one,
generating even stronger financial returns; and
- Presents opportunities for high impact
synergies and capital spending efficiency.
Total S.A. Transaction
As announced on May 5, 2019, Occidental has entered into a
binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and
South Africa assets to Total S.A. (“Total”) (NYSE: TOT) for $8.8
billion. The sale is contingent upon Occidental completing its
acquisition of Anadarko, and would be expected to close
simultaneously or as soon as reasonably practicable afterwards.
Financing
Occidental expects to fund the cash portion of the consideration
through a combination of cash from its balance sheet and fully
committed debt and equity financing, including proceeds from the
previously announced $10 billion equity investment by Berkshire
Hathaway, Inc. The transaction is not subject to a financing
condition.
Occidental is confident in its ability to realize the full
potential of the transaction while maintaining a strong balance
sheet, investment grade credit rating and its current dividend.
Occidental expects to reduce debt over the next 24 months through
free cash flow growth, realizing identified synergies and executing
a planned portfolio optimization strategy with $10-15 billion of
divestitures over the next 12-24 months; $8.8 billion of which has
already been agreed through the transaction with Total.
Integration
Glenn Vangolen, Occidental’s Senior Vice President of Business
Support, will lead an integration team that will include
representatives from both Occidental and Anadarko.
Approvals and Timing
Occidental’s acquisition of Anadarko has been unanimously
approved by the Boards of both companies, and the Anadarko Board of
Directors unanimously recommends that Anadarko shareholders approve
the transaction with Occidental.
The transaction is expected to close in the second half of 2019
and is subject to customary closing conditions, including approval
from Anadarko’s shareholders and the receipt of regulatory
approvals.
Advisors
Bank of America Merrill Lynch and Citi are acting as
Occidental’s financial advisors. Cravath, Swaine & Moore LLP is
serving as legal counsel.
About Occidental
Occidental is an international oil and gas exploration and
production company with operations in the United States, Middle
East and Latin America. Headquartered in Houston, Occidental is one
of the largest U.S. oil and gas companies, based on equity market
capitalization. Occidental’s midstream and marketing segment
purchases, markets, gathers, processes, transports and stores
hydrocarbons and other commodities. The company’s wholly owned
subsidiary OxyChem manufactures and markets basic chemicals and
vinyls. Occidental posts or provides links to important information
on its website at oxy.com.
Forward Looking
Statements
Any statements in this press release about Occidental’s
expectations, beliefs, plans or forecasts, including statements
regarding the proposed transaction between Occidental and Anadarko
or the proposed sale of Anadarko’s assets in Algeria, Ghana,
Mozambique and South Africa to Total S.A., benefits and synergies
of the proposed transactions and future opportunities for the
combined company and products and securities, that are not
historical facts are forward-looking statements. These statements
are typically identified by words such as “estimate,” “project,”
“predict,” “will,” “would,” “should,” “could,” “may,” “might,”
“anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,”
“target,” “objective,” “likely” or similar expressions that convey
the prospective nature of events or outcomes. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. Actual results may
differ from anticipated results, sometimes materially, and reported
or expected results should not be considered an indication of
future performance. Factors that could cause actual results to
differ include, but are not limited to: Occidental’s ability to
consummate the proposed transaction with Anadarko or the proposed
transaction with Total; the conditions to the completion of the
proposed transactions, including the receipt of Anadarko
stockholder approval for the proposed transaction between
Occidental and Anadarko; that the regulatory approvals required for
the proposed transactions may not be obtained on the terms expected
or on the anticipated schedule or at all; Occidental’s ability to
finance the proposed transaction with Anadarko, including
completion of any contemplated equity investment; Occidental’s
indebtedness, including the substantial indebtedness Occidental
expects to incur in connection with the proposed transaction with
Anadarko and the need to generate sufficient cash flows to service
and repay such debt; Occidental’s ability to meet expectations
regarding the timing, completion and accounting and tax treatments
of the transaction contemplated by the binding agreement with Total
or the proposed transaction with Anadarko; the possibility that
Occidental may be unable to achieve expected synergies and
operating efficiencies within the expected time-frames or at all
and to successfully integrate Anadarko’s operations with those of
Occidental; that such integration may be more difficult,
time-consuming or costly than expected; that operating costs,
customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers or suppliers) may be greater than expected
following the proposed transaction or the public announcement of
the proposed transaction; the retention of certain key employees of
Anadarko may be difficult; that Anadarko and Occidental are subject
to intense competition and increased competition is expected in the
future; general economic conditions that are less favorable than
expected. Additional risks that may affect Occidental’s results of
operations and financial position appear in Part I, Item 1A “Risk
Factors” of Occidental’s Annual Report on Form 10-K for the year
ended December 31, 2018, and in Occidental’s other filings with the
U.S. Securities and Exchange Commission (“SEC”). Additional risks
that may affect Anadarko’s results of operations appear in Part I,
Item 1A “Risk Factors” of Anadarko’s Annual Report on Form 10-K for
the year ended December 31, 2018, and in Anadarko’s other filings
with the SEC.
Because the factors referred to above could cause actual results
or outcomes to differ materially from those expressed or implied in
any forward-looking statements, you should not place undue reliance
on any such forward-looking statements. Further, any
forward-looking statement speaks only as of the date of this press
release and, unless legally required, Occidental does not undertake
any obligation to update any forward-looking statement, as a result
of new information, future events or otherwise.
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to
Find It
In connection with the proposed transaction, Occidental will
file with the SEC a registration statement on Form S-4 containing a
preliminary prospectus of Occidental that also constitutes a
preliminary proxy statement of Anadarko. After the registration
statement is declared effective, Anadarko will mail a definitive
proxy statement/prospectus to stockholders of Anadarko. This press
release is not a substitute for the proxy statement/prospectus or
registration statement or other document Occidental and/or Anadarko
may file with the SEC in connection with the proposed
transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS, REGISTRATION STATEMENT, AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT OCCIDENTAL, ANADARKO AND THE PROPOSED
TRANSACTION. Any definitive proxy statement/prospectus (when
available) will be mailed to stockholders of Anadarko. Investors
and security holders will be able to obtain copies of these
documents (when available) and other documents filed with the SEC
by Occidental and Anadarko free of charge through the website
maintained by the SEC at www.sec.gov. Copies of the documents filed
by Occidental and Anadarko (when available) will also be available
free of charge by accessing their websites at www.oxy.com and
www.anadarko.com, respectively.
Participants
This press release is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, Occidental, Anadarko and their
directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information
about Occidental’s executive officers and directors is available in
Occidental’s Annual Report on Form 10-K for the year ended December
31, 2018, which was filed with the SEC on February 21, 2019, and in
its proxy statement for the 2019 Annual Meeting which was filed
with the SEC on March 28, 2019. To the extent holdings of
Occidental securities have changed since the amounts printed in the
proxy statement for the 2019 Annual Meeting, such changes have been
or will be reflected on Statements of Change in Ownership on Form 4
filed with the SEC. Information about Anadarko’s executive officers
and directors is available in Anadarko’s Annual Report on Form 10-K
for the year ended December 31, 2018, which was filed with the SEC
on February 14, 2019, and in its proxy statement for the 2019
Annual Meeting which was filed with the SEC on March 29, 2019. To
the extent holdings of Anadarko securities have changed since the
amounts printed in the proxy statement for the 2019 Annual Meeting,
such changes have been or will be reflected on Statements of Change
in Ownership on Form 4 filed with the SEC. Additional information
regarding the interests of such potential participants will be
included in the registration statement, proxy statement/prospectus
and other relevant documents filed with the SEC when they become
available. These documents will be available free of charge from
the sources indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190509006041/en/
Media:Melissa E.
Schoeb713-366-5615melissa_schoeb@oxy.comorInvestors:Jeff
Alvarez713-215-7864jeff_alvarez@oxy.comDan BurchMacKenzie Partners,
Inc.212-929-5748dburch@mackenziepartners.com
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