By Godson Ikiebey-

The second largest US oil and gas company, Chevron, has agreed a $50 billion deal to buy Anadarko Petroleum, one of the country’s leading independent producers, in the most significant move towards consolidation in the industry in the period of weaker oil prices that began in 2014.

Chevron’s takeover of Anadarko, will strengthen the company’s position in US shale oil production in the Permian Basin of Texas and New Mexico, which it has been betting on as a strategic priority for expansion.

The deal also brings the group more assets in deep water oil and liquefied natural gas, including Anadarko’s important new development in Mozambique.

It is expected that the acquisition will deliver cost and capital savings worth $2 billion a year.

The terms of the deal mean Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share, valuing the equity at a total of $33 billion

The total enterprise value of the deal, including Anadarko’s debt, is $50 billion.

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