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Chevron-Hess Merger Faces Increased Uncertainty Amid Legal Challenges

 |  May 22, 2024

The $60 billion merger between Chevron and Hess has encountered significant turbulence as three lawsuits have been filed in the United States, raising concerns over the disclosure of key information related to the transaction.

The lawsuits, aimed at Hess, challenge the omission of crucial details in filings with the U.S. Securities and Exchange Commission (SEC). These legal actions focus particularly on an April 26 filing intended to solicit proxies for a shareholder vote scheduled for May 28. The lawsuits seek to halt the merger until Hess rectifies the alleged disclosure deficiencies.

In response, Hess disclosed additional information in a regulatory filing on Tuesday, aiming to address the plaintiffs’ claims and minimize further complications. Despite this, Hess maintains that the claims are “without merit.”

Among the newly added details, Hess revealed that Chevron’s proposal included an invitation for Hess CEO John Hess to join Chevron’s board post-merger. The updated disclosures also provided more clarity on how the acquisition price was determined and specified the transaction-related fees.

Read more: Chevron Completes Acquisition of Renewable Energy Group

The legal battles are taking place across multiple jurisdictions: the Court of the Southern District of New York, the Delaware Court of Chancery, and the Supreme Court of the State of New York.

“All of the defendants named in the matters believe that the matters are without merit,” Hess stated. “However, litigation is inherently uncertain, and there can be no assurance regarding the likelihood that the defense of the actions will be successful.”

Furthermore, Hess acknowledged the possibility of additional lawsuits related to the merger and the proxy statement, noting that several purported stockholders have already sent demand letters alleging similar disclosure issues.

Source: Rig Zone