Chevron Corp agrees to acquire Noble Energy Inc. in an all-stock deal on Monday, the biggest tie-up after the oil price crash amid the coronavirus crisis.
Based on a 10-day average, Chevron said it the takeover values of both the companies would typify a 7.6% premium over Noble’s Friday closing price of $9.65 as the deal would be valued at nearly $13 million.
The acquisition of Houston-based oil-and-gas producer Noble aims at expanding Chevron’s presence in the Permian Basin and DJ Basin of Colorado as well as diversify its overseas holdings, according to Chevron.
One of the key components of the deal is Noble Energy’s natural-gas projects in the eastern Mediterranean as the assets will supply natural gas to Egypt, Israel, and Jordan. Chief financial officer Pierre Breber said that the issuance of new equity will be a win-win situation for both Noble and Chevron shareholders. According to analysts, Chevron’s financial obligations (net debt of $23.8 billion at the end of Q1) are substantially lower than those of other oil majors. The deal is hoped to become incremental in another year after closing, expected for the fourth quarter.