Chevron to buy Hess for $53bn in latest oil megadeal

Chevron Corp. agreed to buy Hess Corp. for $53 billion, the latest major US oil takeover as the 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%, 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.

This is the second major deal in the US oil industry in just a few weeks. Exxon Mobil Corp. has agreed to buy shale-oil producer Pioneer Natural Resources Co. for $58 billion, underpinning a bet that oil and gas will remain central to the world’s energy mix for decades to come. Chevron said the acquisition will deliver faster growth and more generous returns to investors.

“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” Chairman and Chief Executive Officer Mike Wirth said in the statement.

The acquisition will give Chevron 30% ownership of more than 11 billion barrels equivalent of recoverable resources in Guyana, one of the world’s major new oil producers with a strong growth outlook, according to the statement. It also adds acreage in the Bakken shale formation and Gulf of Mexico to the company’s portfolio.

The transaction has been unanimously approved by the boards of both companies and should close in the first half of 2024, according to the statement. It is subject to approval from Hess shareholders, regulators and other customary closing conditions.