Chevron Corp. has acquired nearly 5% of Hess Corp., demonstrating its confidence in prevailing over ExxonMobil Corp. in an arbitration dispute that has postponed the Hess acquisition for over a year.
Between January and March of this year, Chevron purchased 15,380,000 shares of Hess, as stated by the Houston-based company, with the stake valued at approximately $2.3 billion based on current market prices. These shares were acquired at a discount compared to the price associated with Chevron’s $53 billion all-stock acquisition agreement for Hess reached in 2023.
The company noted that these acquisitions “reflect Chevron’s ongoing confidence in the successful completion of the pending acquisition of Hess.”
Chevron’s decision to acquire Hess in 2023 was primarily driven by its 30% interest in the rapidly expanding major oil project in Guyana, which is operated by Exxon. However, about six months post-agreement, Exxon initiated arbitration, claiming a right of first refusal regarding Hess’s stake in Guyana. Chevron contends that this right does not apply in the context of a corporate merger. The arbitration is set to be heard in May, with a ruling expected by September.
In addition to these acquisitions, Chevron’s stock purchases this year also included regular buybacks of its own shares, the company reported.
SOURCE: Bloomberg News