Energy firm Chevron has agreed to acquire US-based Noble Energy in an all-stock transaction valued at $5bn.
Under the terms of the deal, Noble Energy shareholders will receive 0.1191 shares of Chevron for each share held. The transaction has a total enterprise value of $13bn including debt.
This is touted to be the biggest energy deal in the US amid the Covid-19 pandemic, which affected the global oil demand, reported Reuters.
Chevron expects the acquisition of Noble Energy to provide low-cost, proved reserves and attractive undeveloped resources, complementing its upstream portfolio.
Additionally, Noble Energy’s low-capital, cash-generating offshore assets in Israel would boost Chevron’s position in the Eastern Mediterranean.
Chevron chairman and CEO Michael Wirth said: “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow.
“These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline. We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organizations.”
Chevron also expects the deal to complement its assets in Denver-Julesburg Basin of Colorado and the Permian Basin in the US.
Noble Energy shareholders to own 3% stake in combined company
Upon completion of the deal, Noble Energy shareholders will have approximately 3% stake in the combined company.
Noble Energy chairman and CEO David Stover said: “The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns.
“As we looked to build on this positive momentum, the Noble Energy Board of Directors and management team conducted a thorough process and concluded that this transaction is the best way to maximize value for all Noble Energy shareholders.”
Scheduled to be completed in the fourth quarter of 2020, the transaction is subject to Noble Energy shareholder approval, regulatory approvals and other customary closing conditions.
Recently, Chevron’s wholly-owned subsidiary Chevron Australia Downstream announced the acquisition of Puma Energy (Australia), for AU$425m ($292.2m).
