customary
pre-closing
covenants of Anadarko and Occidental, including a covenant of Anadarko relating to conducting its business in the ordinary course,
and covenants of each party to refrain from taking certain actions without the other party’s consent. Anadarko and Occidental also agreed to use their respective best efforts to cause the Merger to be consummated and to obtain expiration or
termination of the waiting period under the HSR Act, subject to certain exceptions, including that Occidental is not required to take or authorize any action that would reasonably be expected to have a material adverse effect (after giving effect to
any reasonably expected proceeds of any divestiture or sale of assets) on the financial condition, business, assets or continuing results of operations of Anadarko (or, in the case of actions with respect to Occidental’s
pre-closing
assets, on a company of Anadarko’s size).
The Merger Agreement provides that, during
the period from the date of the Merger Agreement until the Effective Time, Anadarko is subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide
non-public
information to third parties and to engage in negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions. Subject to certain exceptions, Anadarko is
required to call a meeting of its stockholders to vote on a proposal to adopt the Merger Agreement and to recommend that its stockholders adopt the Merger Agreement.
The Merger Agreement contains termination rights for each of Anadarko and Occidental, including, among others, (1) if the consummation of
the Merger does not occur on or before February 9, 2020, subject to extension to May 9, 2020 for certain limited purposes, including obtaining U.S. antitrust clearance, and (2) subject to certain conditions, if Anadarko wishes to
terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal (as such term is defined in the Merger Agreement). Upon termination of the Merger Agreement under specified circumstances, including the
termination by Occidental in the event of a change of recommendation by the board of directors of Anadarko or by Anadarko to enter into a definitive agreement with respect to a Superior Proposal, Anadarko would be required to pay Occidental a
termination fee of $1,000,000,000. The Merger Agreement also provides that, in connection with a termination of the Merger Agreement by Anadarko due to an uncured or incurable breach by Occidental, Occidental will be required to reimburse Anadarko
for the $1,000,000,000 termination fee that was paid by Anadarko to Chevron Corporation (“
Chevron
”) in connection with the termination of the previously announced Agreement and Plan of Merger, dated as of April 11, 2019, by and
among Anadarko, Chevron, Justify Merger Sub 1 Inc., a wholly owned subsidiary of Chevron, and Justify Merger Sub 2 Inc., a wholly owned subsidiary of Chevron (the “
Chevron Merger Agreement
”).
The foregoing description of the Merger Agreement and the transactions contemplated thereby in this Current Report on
Form 8-K
is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and
incorporated by reference herein.
The Merger Agreement has been included to provide investors with information regarding its terms. It is
not intended to provide any other factual information about Anadarko or Occidental. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein,
were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not
third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of
their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in
Anadarko’s public disclosures.
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