FTC Clears Chevron's $53B Hess Merger, Sets Restriction For John Hess
Portfolio Pulse from Anusuya Lahiri
The FTC has cleared Chevron's $53 billion merger with Hess, with a condition that Hess CEO John Hess will not join Chevron's board. Instead, he will serve as an advisor. The merger still requires resolution of arbitration regarding preemptive rights in a Guyana joint venture. Chevron will own a 30% stake in Guyana's oil production consortium, led by Exxon Mobil with a 45% stake.
September 30, 2024 | 4:02 pm
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NEUTRAL IMPACT
Exxon Mobil, as a partner in the Guyana oil consortium, has asserted preemptive rights that could affect Chevron's merger with Hess. The arbitration on this matter is expected in May 2025.
Exxon Mobil's assertion of preemptive rights in the Guyana joint venture introduces uncertainty into the Chevron-Hess merger. However, the arbitration is not expected until 2025, so the immediate impact on Exxon's stock is limited.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 50
POSITIVE IMPACT
Chevron's $53B merger with Hess has been cleared by the FTC, with John Hess serving as an advisor instead of a board member. The merger still requires resolution of arbitration regarding preemptive rights in a Guyana joint venture.
The FTC clearance is a significant step forward for Chevron's merger with Hess, which is a major strategic move. The condition regarding John Hess's role is unlikely to impact the merger negatively. The pending arbitration is a risk but Chevron remains confident.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Hess's merger with Chevron has been approved by the FTC, with John Hess taking an advisory role. The merger is still subject to arbitration regarding preemptive rights in a Guyana joint venture.
The FTC approval is a positive development for Hess, as it moves closer to completing the merger with Chevron. The advisory role for John Hess maintains his influence. The arbitration is a potential hurdle but is not expected to derail the merger.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100