01—Abstract
Summary
Summary of the 8-K filed September 30, 2024. Cited figures are marked; the original filing is the authoritative source.
On September 30, 2024, Chevron disclosed that the U.S. Federal Trade Commission completed its antitrust review of the proposed acquisition of Hess Corporation and that a majority of FTC Commissioners voted to accept a consent agreement with Chevron and Hess.
The FTC clearance satisfies a key closing condition under the Hart-Scott-Rodino Act, removing the main regulatory obstacle to the transaction, which was announced in October 2023. As part of the Consent Agreement, John B. Hess will not join Chevron's Board after closing.
He will instead serve as an advisor on government relations and social investments in Guyana and on support for the Salk Institute's Harnessing Plants Initiative. The merger is not yet complete. Closing remains conditional on resolving the arbitration over preemptive rights in the Stabroek Block joint operating agreement, which is the principal remaining risk.
Chevron says it is confident the arbitration will affirm its position. Under HSR rules the parties have one year from the expiration of the waiting period (July 1, 2024) to close, and they will take steps to maintain HSR clearance while the arbitration proceeds, including refiling if necessary. Hess shareholders approved the merger in May 2024.
For investors, the filing is a positive but incremental development. It removes a major antitrust uncertainty and advances the strategic goal of adding Hess's assets, particularly its Guyana interests, to Chevron's portfolio.
Investors should still monitor the Stabroek arbitration, since an adverse outcome could delay or derail the deal. The filing does not include financial statements, deal pricing changes, or updated financial projections.
02—Key points
Key Highlights
- FTC completed its antitrust review of the Chevron-Hess merger, satisfying a key HSR Act closing condition after the waiting period expired on July 1, 2024.
- The FTC majority accepted a Consent Agreement with Chevron and Hess; John B. Hess will not be appointed to Chevron's Board after the merger closes.
- John B. Hess will instead serve as an advisor to Chevron on Guyana government relations, social investments in Guyana, and support for the Salk Institute's Harnessing Plants Initiative.
- Merger completion remains conditional on resolving the arbitration over preemptive rights in the Stabroek Block joint operating agreement.
- Under HSR regulations, the parties have one year from the waiting period's expiration to close, and Chevron and Hess will take steps to maintain HSR clearance during the arbitration.
- Hess shareholders approved the merger agreement in May 2024, and Chevron expressed confidence that the arbitration will affirm its position.
03—Questions
Frequently Asked Questions
Has the Chevron-Hess merger been approved?
Not fully. The FTC completed its antitrust review and accepted a consent agreement, which satisfies a key regulatory closing condition. The merger still requires resolution of the Stabroek Block arbitration over preemptive rights before it can close.
Why won't John Hess join Chevron's Board?
Under the Consent Agreement with the FTC, Chevron and Hess agreed that John B. Hess would not be appointed to Chevron's Board after the merger closes. He will serve as an advisor on Guyana government relations, social investments in Guyana, and the Salk Institute's Harnessing Plants Initiative.
What is the main risk that could still prevent the deal from closing?
The main risk is the arbitration over preemptive rights in the Stabroek Block joint operating agreement in Guyana. If the arbitration is not resolved satisfactorily, the merger may not close. Chevron says it is confident the arbitration will affirm its position.
Is there a deadline for completing the merger?
Under HSR Act regulations, the parties have one year from the expiration of the waiting period, which expired July 1, 2024, to close. Chevron and Hess plan to maintain HSR clearance, including refiling if necessary, while the arbitration proceeds.
Did shareholders approve the merger?
Yes. Hess shareholders approved the merger agreement in May 2024, according to the company's news release.
04—Continue