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Hess Shareholders Approve $53 Billion Merger with Chevron

 |  May 28, 2024

Hess Corporation’s shareholders have approved the company’s $53 billion merger with Chevron, the second-largest oil company in the United States. According to Reuters, the merger required a majority vote from Hess’ 308 million shares outstanding to pass, although the specific vote tally was not immediately disclosed by the company.

Chevron’s acquisition offer, made last October, aims to enhance its presence in Guyana’s lucrative offshore oil fields, which are among the most promising in the world. Despite the shareholder approval, the deal’s completion has been complicated by ongoing regulatory scrutiny and legal challenges. The U.S. Federal Trade Commission (FTC) is currently reviewing the merger, and an arbitration claim filed by Exxon Mobil and China National Offshore Oil Corporation (CNOOC), Hess’ partners in Guyana, further clouds the timeline for closing the transaction.

Read more: The Case for an Exxon-Chevron Merger

The approval marks a significant victory for Hess CEO John Hess, who has faced pressure from some shareholders demanding additional compensation for the delays. These shareholders expressed concerns over the extended timeline and potential impacts on the deal’s value.

Industry analysts, such as Mark Kelly from financial firm MKP Advisors, suggest that the merger will proceed if Chevron either prevails in the arbitration or negotiates a settlement with Exxon. “Assuming Chevron wins the arbitration from Exxon or finds a settlement, the transaction is now going to happen,” Kelly noted.

However, the arbitration and regulatory reviews could delay the finalization of the merger into 2025, leaving a period of uncertainty for both companies and their investors. The merger is poised to reshape the competitive landscape in the oil sector, particularly in the rapidly developing fields off the coast of Guyana.

Source: Reuters