FX.co ★ Chevron to buy Hess for $53 billion

Chevron Corporation has reached an agreement to acquire its oil industry rival, Hess, for $53 billion, which includes debt, as part of a massive deal in the US oil market. Moreover, Chevron is set to take over all the circulating shares of its competitor. The American oil giant Chevron is prepared to pay $171 per share of the company. Hess shareholders will receive 1.025 shares of Chevron for each Hess share they own. This exchange suggests a premium of 10.3% over the average share price. At present, the value of the deal is estimated at $53 billion, but when considering the debt, it amounts to $60 billion. A final decision is anticipated in the first half of 2024. This acquisition is expected to solidify Chevron's standing in the international oil market, especially by gaining Hess's assets in Guyana, where significant oil reserves have recently been discovered. The recoverable resources of the Stabroek block in Guyana are estimated at more than 11 billion barrels of oil. While Hess might have preferred to capitalize on these resources, standing up to a behemoth like Chevron proved too daunting. As a result, the larger business has assimilated the smaller one, growing even more substantial in the process. This is not the first mega oil deal in the US oil market. In October, another leader in the American oil industry, Exxon Mobil, conducted a similar one. The company acquired its rival, Pioneer Natural Resources, which had been developing shale fields in Texas's Permian Basin. The deal was valued at $59.5 billion, with the premium reaching 18%, marking the largest acquisition since 1999 and significantly bolstering Exxon Mobil's positions. Such acquisitions allow corporations to dominate in the Permian Basin of Texas, the largest oil-producing field in the US. Against this backdrop, Brent crude fell below $92 per barrel. Later, oil prices further dipped to $91.4 per barrel.