Chevron Clears Major Hurdle in Hess Merger as FTC Approves Antitrust Review

Chevron Corporation announced today that the Federal Trade Commission (FTC) has successfully completed its antitrust review of the company’s proposed merger with Hess Corporation. The review marks a significant step toward finalizing the deal, which has been positioned as a transformative acquisition for Chevron, both in terms of its portfolio and its impact on the global energy industry.

According to Yahoo News, the completion of the FTC’s antitrust review satisfies one of the key conditions for the closing of the merger. Chevron Chairman and CEO Mike Wirth highlighted the importance of this milestone, noting that it moves the company closer to integrating Hess’s assets. “This is an important step toward completing the merger, which will benefit our shareholders, the industry, and the country of Guyana,” Wirth said. He also expressed optimism about the strategic value Hess will bring, particularly in terms of the company’s portfolio of world-class assets.

In a notable development to ensure the smooth completion of the merger, Hess and Chevron agreed that John Hess, CEO of Hess Corporation, will not join Chevron’s Board of Directors, as initially anticipated. Instead, per Yahoo News, Hess will take on an advisory role, focusing on government relations and social investments in Guyana, as well as supporting Chevron’s efforts with the Salk Institute’s Harnessing Plants Initiative.

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Wirth expressed regret that Chevron’s board would not directly benefit from John Hess’s decades of global experience but emphasized the value Hess will still contribute in his advisory role. “I have the utmost respect for John, the company he has built, and the contributions he has made to our industry,” Wirth added.

Despite clearing the antitrust hurdle, Chevron’s merger with Hess is not yet fully completed. According to Yahoo News, the transaction remains subject to other closing conditions, including resolving arbitration proceedings over preemptive rights in the Stabroek Block joint operating agreement. Chevron has expressed confidence that the arbitration process will affirm its position, and with Hess shareholders having already approved the merger agreement in May 2024, the deal is expected to close once these remaining issues are resolved.

Chevron’s merger with Hess is seen as a significant move in the energy sector, with industry analysts closely watching the deal’s impact, particularly in the resource-rich region of Guyana. The acquisition promises to enhance Chevron’s energy portfolio and solidify its position as one of the world’s leading energy companies.

Source: Yahoo News