Summary
Chevron Corporation has officially terminated its previously announced agreement to acquire Anadarko Petroleum Corporation. The company announced on May 9, 2019, that it would not make a counterproposal to acquire Anadarko's outstanding shares. Following this decision, Anadarko delivered a termination notice to Chevron, and the merger agreement was subsequently terminated on May 9, 2019. As part of the termination, Anadarko will pay Chevron a breakup fee of $1 billion in cash. This development signifies a significant shift in Chevron's M&A strategy and potentially opens the door for other suitors for Anadarko. Investors should monitor Chevron's future capital allocation and strategic priorities in light of this terminated transaction.
Key Highlights
- 1Chevron Corporation has terminated its Agreement and Plan of Merger with Anadarko Petroleum Corporation.
- 2Chevron decided not to make a counterproposal to acquire Anadarko's common stock.
- 3Anadarko Petroleum Corporation terminated the Merger Agreement on May 9, 2019.
- 4Anadarko will pay Chevron a termination fee of $1 billion in cash.
- 5The termination fee of $1 billion is a significant financial consideration for Chevron.
- 6This event indicates a change in Chevron's pursuit of Anadarko as an acquisition target.
Frequently Asked Questions
Chevron announced on May 9, 2019, that it would not make a counterproposal to acquire Anadarko's outstanding shares, which led to the termination of the merger agreement.
Yes, Anadarko Petroleum Corporation will pay Chevron a termination fee of $1 billion in cash as per the terms of the Merger Agreement.
This termination means Chevron will retain its capital, avoiding the significant expenditure of the Anadarko acquisition. Investors should watch for how Chevron redeploys this capital and reassesses its strategic growth initiatives. It also suggests Chevron may have faced competitive bidding or reconsidered the strategic fit at the final proposed price.
While this filing doesn't confirm another acquisition, Chevron's decision not to counterbid and Anadarko's termination of the agreement likely make Anadarko available for other potential suitors. Investors should monitor Anadarko's news for further developments.