The U.S.' second-largest energy company Chevron announced its agreement Friday to buy American oil and natural gas exploration and production firm Anadarko for $33 billion.
California-based Chevron said in a statement it has entered into a definitive agreement with Anadarko Petroleum Corporation to acquire all of its outstanding shares in a stock and cash transaction valued at $33 billion, based on $65 per share.
As part of the deal, Anadarko shareholders will receive 0.3869 shares of Chevron, in addition to $16.25 cash for each of Anadarko shares.
After the announcement of the deal, Chevron's stock price declined by around 4.4% to $120.50 per share during pre-market trading on the New York Stock Exchange, while Anadarko saw its stock value soar 34.5% to $62.93 per share.
The deal is to strengthen Chevron's position in two of the most lucrative areas in the U.S. energy industry -- shale resources and liquefied natural gas (LNG).
Anadarko has major shale oil and gas operations throughout the U.S., on top of natural gas projects in Mozambique and Algeria.
"The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business," Chevron Chairman and CEO Michael Wirth said in the statement.
As of the end of 2018, Anadarko had 1.47 billion barrels equivalent of proved reserves, according to the statement.
Expected to close in the second half of the year, the deal was approved by the boards of directors of both firms but awaits approvals from Anadarko's shareholder and regulatory bodies.
By Ovunc Kutlu