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In a major turn of events, supermajor Chevron pulled back from the takeover battle for Anadarko, yesterday. Occidental, which received $10 billion in financial assistance from Berkshire Hathaway, has emerged victorious in one of the largest takeover contests in the oil and gas industry. Chevron received a $1 billion breakup fee from Occidental Petroleum, to be utilized in a $5 billion share repurchase program.
Supermajor, Total yesterday inked an $8.8 billion asset purchase deal with Occidental, and dropped a new bombshell in the ongoing Chevron-Anadarko-Occidental battle. If Occidental wins the bid, then the binding agreement will require the firm to sell Anadarko Petroleum’s oil and gas assets in Africa. Post divestment, Occidental will gain ownership to the Western Midstream Partners and Anadarko’s acreages in U.S. shale basins, the Gulf of Mexico and South America.
In an interesting turn of events on Tuesday, Warren Buffett-owned Berkshire Hathaway backed Occidental’s $38 billion-bid for Anadarko. Berkshire commitment of $10 billion aid will greatly boost Occidental’s chances of securing a win in one of the biggest oil-industry takeover battles. However, the help comes at the cost of 100,000 preferred shares and a warrant to buy upto 80 million shares of Occidental at $62.50 apiece in a private offering.
According to the Chicago's investment firm Harris Associates, after Berkshire's $10 billion support to Occidental, Chevron no longer stands a chance to buy Anadarko. “I think at this point you would consider Chevron’s bid dead”, said chief investment officer at Harris. Buffet's firm decided to back Occidental a day after Anadarko agreed for the negotiations with Occidental.
In a rather surprising move, Occidental Petroleum placed a new bid for the acquisition of Anadarko Petroleum on Wednesday. The new bid tops the $33 billion acquisition bid offered by supermajor, Chevron. If successful, the acquisition will add approximately quarter million acres to Occidental’s acreage in the Permian shale, all the while boosting its global production to 1.4 million barrels of oil and gas per day.
Steve Chazen was the man behind the grand success of Occidental Petroleum Corporation. He stepped down as Occidental’s CEO in 2016 after a prolific career of more than 20 years at the company. Chazen is looking forward to employ the previous success model in south Texas with a $2.66 billion deal.