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Chevron-Hess Merger Clears FTC Antitrust Review

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Chevron announced that the Federal Trade Commission (FTC) has completed its antitrust review of the company's merger with Hess , satisfying a key closing condition. Chevron Chairman and CEO Mike Wirth expressed optimism about the merger's benefits for shareholders, the industry, and Guyana. To facilitate the merger's completion, Hess CEO John Hess will not join Chevron's Board of Directors but will serve as an advisor on government relations and social investments in Guyana, as well as support for the Salk Institute's Harnessing Plants Initiative.

The merger's completion remains subject to other closing conditions, including the resolution of ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement. Chevron is confident in its position regarding the arbitration process. Hess shareholders approved the merger agreement in May 2024.

Chevron ha annunciato che la Commissione Federale del Commercio (FTC) ha completato la revisione antitrust della fusione con Hess, soddisfacendo una condizione chiave per la chiusura. Mike Wirth, Presidente e CEO di Chevron, ha espresso ottimismo riguardo ai benefici della fusione per gli azionisti, l'industria e la Guyana. Per facilitare il completamento della fusione, il CEO di Hess, John Hess, non entrerà a far parte del Consiglio di Amministrazione di Chevron, ma fungerà da consulente su questioni governative e investimenti sociali in Guyana, oltre a supportare l'Iniziativa Harnessing Plants del Salk Institute.

Il completamento della fusione rimane soggetto ad altre condizioni di chiusura, inclusa la risoluzione di procedimenti arbitrali in corso riguardanti i diritti di prelazione nell'accordo di operazione congiunta del Blocco Stabroek. Chevron è fiduciosa nella propria posizione riguardo al processo arbitrale. Gli azionisti di Hess hanno approvato l'accordo di fusione a maggio 2024.

Chevron anunció que la Comisión Federal de Comercio (FTC) ha completado su revisión antimonopolio de la fusión con Hess, satisfaciendo una condición clave para el cierre. Mike Wirth, Presidente y CEO de Chevron, expresó optimismo sobre los beneficios de la fusión para los accionistas, la industria y Guyana. Para facilitar la finalización de la fusión, el CEO de Hess, John Hess, no se unirá a la Junta Directiva de Chevron, pero servirá como asesor en relaciones gubernamentales e inversiones sociales en Guyana, así como apoyará la Iniciativa Harnessing Plants del Salk Institute.

La finalización de la fusión sigue estando sujeta a otras condiciones de cierre, incluida la resolución de procedimientos de arbitraje en curso sobre derechos de preferencia en el acuerdo de operación conjunta del bloque Stabroek. Chevron tiene confianza en su posición respecto al proceso de arbitraje. Los accionistas de Hess aprobaron el acuerdo de fusión en mayo de 2024.

쉐브론연방거래위원회(FTC)헤스와의 합병에 대한 반독점 검토를 완료하여 주요 마감 조건을 충족했다고 발표했습니다. 쉐브론의 회장 겸 CEO인 마이크 위르스는 합병이 주주, 산업 및 가이아나에 미치는 이점에 대해 낙관을 표명했습니다. 합병 완료를 용이하게 하기 위해 헤스 CEO인 존 헤스는 쉐브론의 이사회에 합류하지 않고 가이아나에서 정부 관계 및 사회 투자에 대한 자문 역할을 하며, Salk Institute의 Harnessing Plants Initiative를 지원할 것입니다.

합병 완료는 Stabroek 블록 공동 운영 계약의 선수권에 대한 진행 중인 중재 절차 해결을 포함하여 다른 마감 조건에 따라 여전히 좌우됩니다. 쉐브론은 중재 프로세스에 대한 자신의 입장에 자신감을 가지고 있습니다. 헤스의 주주들은 2024년 5월에 합병 계약을 승인했습니다.

Chevron a annoncé que la Federal Trade Commission (FTC) a achevé son examen antitrust de la fusion avec Hess, satisfaisant ainsi une condition clé de clôture. Mike Wirth, Président et CEO de Chevron, a exprimé son optimisme quant aux avantages que la fusion apportera aux actionnaires, à l’industrie et à la Guyane. Pour faciliter l’achèvement de la fusion, le CEO de Hess, John Hess, ne rejoindra pas le conseil d'administration de Chevron, mais agira comme conseiller pour les relations gouvernementales et les investissements sociaux en Guyane, ainsi que pour le soutien à l'Initiative Harnessing Plants de l'Institut Salk.

L’achèvement de la fusion reste soumis à d’autres conditions de clôture, y compris la résolution des procédures d’arbitrage en cours concernant les droits de préemption dans l'accord d'exploitation conjointe du bloc Stabroek. Chevron est confiante dans sa position concernant le processus d'arbitrage. Les actionnaires de Hess ont approuvé l'accord de fusion en mai 2024.

Chevron gab bekannt, dass die Federal Trade Commission (FTC) die wettbewerbsrechtliche Prüfung der Fusion mit Hess abgeschlossen hat, was eine entscheidende Abschlussbedingung erfüllt. Mike Wirth, Vorsitzender und CEO von Chevron, äußerte Optimismus über die Vorteile der Fusion für die Aktionäre, die Branche und Guyana. Um den Abschluss der Fusion zu erleichtern, wird Hess CEO John Hess nicht dem Vorstand von Chevron beitreten, sondern als Berater für Regierungsbeziehungen und soziale Investitionen in Guyana tätig sein sowie das Harnessing Plants Initiative des Salk Institute unterstützen.

Der Abschluss der Fusion bleibt weiteren Abschlussbedingungen unterworfen, einschließlich der Klärung laufender Schiedsverfahren bezüglich von Vorrechten im Joint Operating Agreement für das Stabroek Block. Chevron ist zuversichtlich in ihrer Position bezüglich des Schiedsverfahrens. Die Aktionäre von Hess genehmigten den Fusionsvertrag im Mai 2024.

Positive
  • FTC antitrust review completed, satisfying a key closing condition
  • Merger expected to benefit shareholders, industry, and Guyana
  • Addition of world-class assets to Chevron's portfolio
  • Hess CEO to serve as advisor on government relations and social investments in Guyana
  • Hess shareholders approved the merger agreement
Negative
  • Hess CEO John Hess will not be appointed to Chevron's Board of Directors
  • Merger completion still subject to ongoing arbitration proceedings

Insights

The FTC's antitrust clearance for Chevron's acquisition of Hess is a significant milestone, potentially creating a $53 billion energy powerhouse. This merger strategically positions Chevron to capitalize on Hess's lucrative assets in Guyana's Stabroek Block, which could substantially boost production and reserves.

However, the decision to exclude John Hess from Chevron's board raises questions about post-merger integration and leadership dynamics. While his advisory role on Guyana operations may mitigate some concerns, it could signal potential challenges in fully leveraging Hess's expertise.

The ongoing arbitration regarding preemptive rights in the Stabroek Block remains a key risk factor. A negative outcome could impact the deal's value proposition, potentially affecting Chevron's share price in the short term. Investors should closely monitor this development as it could significantly influence the merger's ultimate success and financial implications.

This merger represents a strategic move in the evolving landscape of the oil and gas industry. By acquiring Hess, Chevron gains a strong foothold in Guyana's offshore oil fields, particularly the prolific Stabroek Block. This asset is important as it's projected to reach production of over 1 million barrels per day by 2027, potentially transforming Chevron's production profile and reserve base.

The deal aligns with the industry trend of consolidation to achieve economies of scale and enhance competitiveness in a challenging market environment. It allows Chevron to diversify its portfolio and reduce its reliance on mature fields, positioning the company for long-term growth in an era of energy transition.

However, the success of this merger will heavily depend on Chevron's ability to efficiently integrate Hess's operations and navigate the complex geopolitical landscape in Guyana. The outcome of the arbitration proceedings could also have significant implications for the deal's value and Chevron's future operations in the region.

SAN RAMON, Calif.--(BUSINESS WIRE)-- Chevron Corporation (NYSE: CVX) today announced the Federal Trade Commission (FTC) completed antitrust review of the company’s merger with Hess Corporation (NYSE: HES), satisfying a key closing condition for the transaction.

“This is an important step toward completing the merger, which will benefit our shareholders, the industry, and the country of Guyana, and add world class assets to our already advantaged portfolio,” said Chevron Chairman and CEO Mike Wirth. “We look forward to completing the transaction and welcoming Hess into our company.”

To facilitate completion of the merger, Hess and Chevron have agreed that Hess CEO John Hess will not be appointed to the Chevron Board of Directors. Instead, Mr. Hess will serve as an advisor to Chevron on government relations and social investments in Guyana as well as on support for the Salk Institute’s Harnessing Plants Initiative.

“I have the utmost respect for John, the company he has built, and the contributions he has made to our industry. It is unfortunate that our Board of Directors will not get the benefit of his decades of global experience, but we look forward to drawing upon his knowledge, relationships and experience in Guyana through his service as an advisor to Chevron,” added Mr. Wirth.

Completion of the merger remains subject to other closing conditions, including the satisfactory resolution of ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement. Chevron remains confident that the arbitration process will affirm the company’s position. Hess shareholders approved the merger agreement in May 2024.

About Chevron

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. More information about Chevron is available at www.chevron.com.

NOTICE

As used in this news release, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

Please visit Chevron’s website and Investor Relations page at www.chevron.com and www.chevron.com/investors, LinkedIn: www.linkedin.com/company/chevron, Twitter: @Chevron, Facebook: www.facebook.com/chevron, and Instagram: www.instagram.com/chevron, where Chevron often discloses important information about the company, its business, and its results of operations.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements relating to Chevron’s operations and lower carbon strategy that are based on management’s current expectations, estimates, and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions, and variations or negatives of these words, are intended to identify such forward-looking statements, but not all forward-looking statements include such words. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine, the conflict in Israel and the global response to these hostilities; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures related to greenhouse gas emissions and climate change; the potential liability resulting from pending or future litigation; the risk that regulatory approvals with respect to the Hess Corporation (Hess) transaction are not obtained or are obtained subject to conditions that are not anticipated by the company and Hess; potential delays in consummating the Hess transaction, including as a result of regulatory proceedings or the ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement; risks that such ongoing arbitration is not satisfactorily resolved and the potential transaction fails to be consummated; uncertainties as to whether the potential transaction, if consummated, will achieve its anticipated economic benefits, including as a result of regulatory proceedings and risks associated with third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the potential transaction that are not waived or otherwise satisfactorily resolved; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement with Hess; risks that the anticipated tax treatment of the potential transaction is not obtained; unforeseen or unknown liabilities or unexpected future capital expenditures relating to Hess; potential litigation relating to the potential transaction that could be instituted against the company or its respective directors; the possibility that the potential transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the effect of the pendency or completion of the potential transaction on the company’s business relationships and business generally; the company’s ability to integrate Hess’ operations in a successful manner and in the expected time period; the possibility that any of the anticipated benefits and projected synergies of the potential transaction will not be realized or will not be realized within the expected time period; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; changes to the company’s capital allocation strategies; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 26 of the company’s 2023 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

Bill Turenne

+1 202-999-8665

Source: Chevron Corporation

FAQ

What is the status of Chevron's merger with Hess (CVX)?

The Federal Trade Commission (FTC) has completed its antitrust review of Chevron's merger with Hess , satisfying a key closing condition. However, the merger's completion is still subject to other conditions, including the resolution of ongoing arbitration proceedings.

Will Hess CEO John Hess join Chevron's Board of Directors after the merger (CVX)?

No, John Hess will not be appointed to Chevron's Board of Directors. Instead, he will serve as an advisor to Chevron on government relations and social investments in Guyana, as well as support for the Salk Institute's Harnessing Plants Initiative.

When did Hess shareholders approve the merger agreement with Chevron (CVX)?

Hess shareholders approved the merger agreement with Chevron in May 2024.

What are the remaining conditions for completing the Chevron-Hess merger (CVX)?

The merger's completion remains subject to other closing conditions, including the satisfactory resolution of ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement.

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