Chevron acquires Algerian oil firm – Anadarko Petroleum

American multinational energy corporation – Chevron, have recently signed a deal to buy Algerian oil firm – Anadarko Petroleum. The final terms of agreement entails that Chevron will acquire all of Anadarko Petroleum outstanding shares; in a stock and cash transaction valued at US$33 billion, or US$65/share.

Anadarko petroleum is Algeria’s largest foreign oil producer, it also has operations in Ghana, Mozambique and South Africa.

On completion of the acquisition; shareholders of the Algerian oil firm will receive 0.3869 Chevron shares and also US$16.25 in cash for each Anadarko share.

Because the acquisition consideration structure is 75 percent stock and 25 percent cash; Chevron will issue 200 million shares, pay US$8 billion in cash and will take up about US$15 billion of net debt.

According to reports this acquisition will help Chevron boost its upstream portfolio and also buttress its leading position in shale, deep-water and natural gas resource basins. Forecasts from Chevron anticipates that in the next one year after closing this deal; its share repurchase rate will increase by US$1 billion to US$5 billion. It will also help to  increase its free cash flow and earnings per share.

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