Chevron has acquired approximately 4.99% of Hess’ common shares, highlighting its confidence in the planned $53bn all-stock merger.
This move, disclosed in a regulatory filing, underscores Chevron’s strategic interest in Hess’ assets, particularly in Guyana’s Stabroek block, reported Reuters.
The US oil giant agreed to purchase Hess in October 2023, aiming to expand its presence in the oil-rich Stabroek block.
The deal has received approval from US regulators and shareholders, although Hess’ partners in Guyana, ExxonMobil and CNOOC, have challenged it in court.
An arbitration panel is set to review the case in May, the report said.
Chevron acquired 15,380,000 Hess shares between January and March, valued at approximately $2.3bn, based on Hess’ closing share price of $150.45.
The acquisition price reflects a strategic discount, as noted by Westchester Capital Management’s co-president, Roy Behren, who stated: “It is a smart and savvy move on their part.”
The merger agreement stipulates that Chevron will offer 1.025 of its shares for each Hess share.
Had the deal closed on Monday, Hess investors would have received $162.69 per share, based on Chevron’s closing price of $158.72.
Chevron had cleared a significant hurdle in the merger process by obtaining Federal Trade Commission approval after an antitrust review in October 2024.
As a condition, Hess CEO John B Hess will not join Chevron’s board of directors.
The combined company’s capital expenditures budget is anticipated to be between $19bn and $22bn.
Hess is engaged in the exploration and production of crude oil and natural gas, with leading positions offshore Guyana, the Bakken shale play in North Dakota, the deep-water Gulf of Mexico and the Gulf of Thailand.
