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Hess shareholders to approve Chevron acquisition

Certs Approvals

The shareholders of oil company Hess Corporation have given their approval to the all-stock acquisition by Chevron, which is said to be worth $53 billion.

The CEO of Hess, John Hess, said he was pleased that most shareholders:

“…recognise the compelling value of this strategic transaction and look forward to the successful completion of our merger with Chevron. Together, we will be positioned as a premier integrated energy company, with the leadership, asset portfolio and financial resources to deliver significant shareholder value for years to come.”

Chevron, which makes the Texaco grease and lubricant range, would also acquire Hess’s 30% stake in Guyana’s prolific Stabroek block, but ExxonMobil, the block’s operator, has asserted that it has right of first refusal for Hess’s stake.

In March, ExxonMobil filed at the International Chamber of Commerce in Paris for arbitration, with proceedings potentially going into next year and complicating the deal.

Some large shareholders voiced concern about the deal as a result. Bigger shareholders like D.E. Shaw and proxy-advisory firm Institutional Shareholder Services recommended abstaining over concerns about arbitration delaying the deal and the valuation of Hess.

Nevertheless, despite the uncertainty, enough shareholders must have seen strategic value in the deal for it to get approval.

Hess’s assets in Guyana are worth an estimated $40 billion. If ExxonMobil is found to have the right to purchase these, and if it exercises that right, it could prevent the merger. Hess would then have to pay a $1.7 billion break-up fee to Chevron.

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