According to Reuters, Chevron agreed to acquire Noble Energy at a 7.5% premium, equivalent to $10.38 at Friday’s closing price. Chevron will finance the transaction with all stocks deal at 0.1191 of Chevron shares for every Noble Energy’s share. The transaction will value Noble Energy at $13 Billion, including net debt.
Noble Energy has an operational footprint in onshore US Shale, offshore operations in Israel and West Africa, and exploration activities in South America, Canada, and Africa.
As the demand for oil and gas continues to drop due to the coronavirus pandemic, many US Shale producers seek bankruptcy protection and look for buyers to avoid closure. The market pressure continues to rise as Russia and Saudi continue the price wars.
Most energy stocks are expected to surge as the merger and acquisition are very active. Major oil companies see an opportunity to acquire wonderful assets at a fair price. Early this month, Berkshire Hathaway acquired Dominion Energy for $10 Billion.