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FTC set to greenlight Chevron’s US$53b acquisition of Hess – Reuters report
Chevron and Hess logos are seen in this illustration taken, October 23, 2023. REUTERS/Dado Ruvic/Illustration
Reuters – The U.S. Federal Trade Commission is expected to greenlight U.S. oil producer Chevron’s, purchase of Hess, as soon as this week, two people familiar with the matter said, leaving Exxon Mobil’s challenge to the US$53 billion deal as its final hurdle.
The proposed merger was first announced last October, and the FTC sent a second information request to Chevron two months later. Hess shares were up as much as 3% in after-hours trading on Monday following the news.
Uncertainty over the deal’s closing has knocked Chevron shares down 1% this year compared to a 6.5% increase in energy share fund XLE.
Exxon and CNOOC Ltd, Hess’s partners in a Guyana joint venture, are challenging the deal by claiming a right of first refusal to any sale of Hess’s Guyana assets, the prize in the proposed merger.
A three-judge arbitration panel is due to consider the case in May 2025. Chevron and Hess say a decision is expected by August, while Exxon expects it by September 2025.
The proposed all-stock acquisition is one of the largest in a consolidating U.S. oil and gas industry where several multi-billion-dollar deals have been disclosed.
Chevron’s announcement of the Hess deal followed Exxon’s US$60 billion purchase of U.S. shale giant Pioneer Natural Resources, which closed in May.
Two other mergers, Occidental Petroleum’s deal for CrownRock and Diamondback Energy’s (FANG.O), bid for Endeavor Energy Resources, have closed even though they came after the Chevron-Hess combination.
The FTC required Exxon to withdraw its offer of a board seat to Pioneer Natural Resources CEO Scott Sheffield as a condition for its go-ahead. The FTC alleged he colluded with OPEC to reduce U.S. oil and gas output to potentially raise the price of oil.
Sheffield denied the allegations and has asked the FTC to vacate its ban on his taking an Exxon board seat.
A spokesperson for the FTC declined to comment on Monday.
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