Summary
Chevron Corporation (CVX) has announced a significant development regarding its previously disclosed acquisition of Hess Corporation. On September 30, 2024, the U.S. Federal Trade Commission (FTC) voted to accept a consent agreement, effectively completing the FTC's review of the merger. This decision signals progress in overcoming regulatory hurdles, though the consummation of the merger is still contingent on other closing conditions. Key to the FTC's consent agreement is the stipulation that John B. Hess will not be appointed to Chevron's Board of Directors post-merger. Mr. Hess is expected to serve in advisory roles related to government relations and social investments in Guyana, as well as supporting the Salk Institute's initiatives. Investors should note that while this FTC clearance is a positive step, the overall completion of the Hess acquisition hinges on the satisfactory resolution of ongoing arbitration proceedings concerning preemptive rights in the Stabroek Block joint operating agreement. The parties have until one year from the HSR Act waiting period expiration (July 1, 2024) to close the deal.
Key Highlights
- 1FTC review of the Chevron-Hess merger is complete following a consent agreement reached on September 30, 2024.
- 2The consent agreement includes a provision that John B. Hess will not join the Chevron Board of Directors after the merger.
- 3John B. Hess will take on advisory roles focusing on government relations and social investments in Guyana, and the Salk Institute's Harnessing Plants Initiative.
- 4The HSR Act waiting period related to the merger expired on July 1, 2024.
- 5Closing of the merger remains subject to the resolution of arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement.
- 6Chevron and Hess have one year from July 1, 2024, to close the merger, and may take steps to maintain HSR clearance if necessary.
- 7The company issued a press release on September 30, 2024, to announce the FTC's decision.