U.S. oil major Chevron will not be increasing its initial bid for the takeover Anadarko and expects the previously agreed deal to be terminated as Anadarko has entered into takeover talks with Oxy which recently submitted a superior offer.
Chevron on Thursday said that “under the terms of its previously announced Merger Agreement with Anadarko Petroleum Corporation (NYSE: APC), it will not make a counterproposal and will allow the four-day match period to expire. Accordingly, Chevron anticipates that Anadarko will terminate the Merger Agreement.”
“Winning in any environment doesn’t mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal,” said Chevron’s Chairman and CEO Michael Wirth. “Our advantaged portfolio is driving robust production and cash flow growth, higher investment returns and lower execution risk. We are well positioned to deliver superior value creation for our shareholders.”
Upon termination of the merger agreement with Chevron, Anadarko will be required to pay Chevron a termination fee of $1 billion.
“Consistent with Chevron’s commitment to superior shareholder returns, the company plans to increase its share repurchase rate by 25 percent to $5 billion per year,” Chevron said.
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