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Chevron To Buy Noble Energy In $5B Deal

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Chevron To Buy Noble Energy In $5B Deal

Chevron Corporation (NYSE: CVX) has agreed to a deal to buy Noble Energy (NASDAQ: NBL) for $10.38 per share in an all-stock transaction valued at $5 billion.

Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total value, including debt, of the transaction, is $13 billion.

Why It's Important: This will be the largest oil company deal since the plummet in oil prices, exacerbated by the coronavirus pandemic.

"This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources," Chevron CEO Michael Wirth said in a statement. "This combination is expected to unlock value for shareholders, generating anticipated annual run-rate cost synergies of approximately $300 million before tax, and it is expected to be accretive to free cash flow, earnings, and book returns one year after close."

The Other Details: The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the fourth quarter of 2020.

Credit Suisse Securities LLC is acting as financial advisor to Chevron. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Chevron. JPMorgan Securities LLC is acting as financial advisor to Noble Energy. Vinson & Elkins LLP is acting as legal advisor to Noble Energy.

Price Action: Chevron shares were trading down 0.73% at $86.55 in Monday’s pre-market session. The stock has a 52-week high of $127 and a 52-week low of $51.60.

Noble Energy shares were trading up 8.75% at $10.50. The stock has a 52-week high of $27.31 and a 52-week low of $2.73.

 

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