US: Chevron drops Anadarko, chooses Occidental bid

Chevron abandoned its takeover bid for Anadarko Petroleum on Thursday, May 9, outmaneuvered by Occidental Petroleum’s higher, US$38 billion offer that included more than three times as much cash, reported Reuters.

With a financing assist from billionaire investor Warren Buffett, Occidental, which is one-quarter the size of Chevron, is the likely victor in a contest that again proved the allure of US shale field.

Occidental has stated it plans to shed most of Anadarko’s non-shale properties in a deal that would cement its position in the Permian Basin of West Texas and New Mexico, the top US shale field.

Chevron CEO Mike Wirth said the company decided at a board meeting on Wednesday to walk away from the takeover battle, even though it could have matched or beaten Occidental’s offer and saw Anadarko as a strategic fit.

“Make no mistake. We have the financial capacity to outbid Occidental, but we concluded that an increased offer would have eroded value to our shareholders, and it would have diminished returns on capital,” Wirth said. “The bar is high. We don’t have a need to do anything. We are not desperate to do a deal.”

Full Content: Reuters

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