Chevron Corporation announced Thursday it won’t increase the $33 billion or $65 a share offer to acquire Anadarko Petroleum Corporation.
It will also not offer a counterproposal and plans to let the four-day match period expire, making way for Occidental to buy Anadarko with a $38 billion or $76 a share offer. Chevron indicated it expects Anadarko to go ahead and terminate the Merger Agreement the two companies announced last month, an announcement that was followed by Occidental’s higher bid.
“Winning in any environment doesn’t mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal,” said Chevron’s Chairman and CEO Michael Wirth. “Our advantaged portfolio is driving robust production and cash flow growth, higher investment returns and lower execution risk. We are well positioned to deliver superior value creation for our shareholders.”
Upon termination of the Merger Agreement, Anadarko will be required to pay Chevron a termination fee of $1 billion. Consistent with Chevron’s commitment to superior shareholder returns, the company plans to increase its share repurchase rate by 25 percent to $5 billion per year.