Anadarko Petroleum Receives Offers From Chevron and Occidental

Chevron isn’t the only suitor interested in acquiring Texas-based Anadarko Petroleum Corp. It appears that Houston’s Occidental Petroleum Corp. has sweetened the deal, offering $76 per share, well over Chevron’s $65 per share.

Here’s where the game of “connect the dots” gets interesting. Back in 2006, Anadarko Petroleum acquired Oklahoma City-based Kerr-McGee Corporation.

A relationship between Kerr-McGee Chemical Corporation and Occidental Chemical Corporation dates back to California in the early 1970s. At the time, Occidental was operating large-scale solar ponds in the Mojave desert. The process involves evaporating brines which create salt on the bottom of the solar ponds. During this time, Kerr-McGee also operated a competing facility on the dry lake beds of Searles Valley. Occidental’s then-CEO, the late Armand Hammer, and Kerr-McGee’s then-CEO, the late Dean McGee, battled for market domination within the small confines of the tiny community of Trona, California. After two years, Occidental called it quits and abruptly left the valley.

If Anadarko accepts the Chevron deal and it goes south, Chevron would receive a $1 billion breakup fee.

Occidental’s CEO admitted that the company has desired to acquire Anadarko for several years. It has made three recent attempts to purchase Anadarko since late March, according to an April 24 letter sent to Anadarko board members by Occidental detailing the proposed acquisition.

“Occidental and Anadarko have a highly complementary asset portfolio, providing us with a unique opportunity to realize significant operating, cost, and capital allocation synergies and achieve near-term cash flow accretion,” said Vicki Hollub, president and CEO of Occidental, in an April 24 press release.

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