Chevron Corp. agreed to buy Hess Corp. for $53 billion, a deal aimed at boosting production growth as the US oil industry bets on an enduring future for fossil fuels.
In an all-stock transaction, Chevron will pay $171 per share for Hess, a premium of about 10% to the 20-day average price, according to a statement from the companies on Monday. Hess shareholders will receive 1.025 shares of Chevron for each Hess share, giving the company a total enterprise value of $60 billion, including debt.
The acquisition will give Chevron a significant foothold in Guyana, the South American country that is one of the world's newest oil producers. It will enable faster production growth and more generous returns to investors, according to the statement.
"The prize here is Guyana," said Peter McNally, an analyst at Third Bridge Group. "And it's only gotten bigger" since oil was first discovered in the country less than a decade ago, he said.
Chevron shares fell 2.3% when regular trading opened in New York. Hess was up 0.7%.
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