Chevron Texaco to buy Unocal for $16.4 billion

Chevron Texaco will acquire Unocal, one of the largest independent oil companies, in a stock and cash transaction valued at approximately $1...

Chevron Texaco will acquire Unocal, one of the largest independent oil companies, in a stock and cash transaction valued at approximately $18 billion, including net debt, the two companies said on Monday. A takeover of Unocal, which is based in El Segundo, California, represents the biggest acquisition in the industry since the consolidation wave of the late 1990s, when Exxon bought Mobil for $80 billion and BP acquired Amoco for $48 billion.

The Chevron Texaco-Unocal acquisition was announced today in a joint statement. Chevron Texaco said the acquisition was subject to approval by Unocal’s shareholders and regulatory agencies.

Chevron Texaco, the second-largest American oil company, said the deal would significantly enhance its position as a leading global energy provider. It would help it meet long-term strategies including growth in core upstream areas and commercialising its undeveloped natural gas resource base, said ChevronTexaco Chairman and CEO Dave O’Reilly. “It is an attractive transaction that provides value in both the near and long-term,” O’Reilly said. The takeover negotiations came after months of speculation over which company would end up buying Unocal, the eighth-largest oil company in the US.

Unocal has refocused its attention on exploration and production, particularly in North America and Asia, after selling its marketing and refining businesses in the US. Chevron Texaco said the combination of the two companies will place it in the top tier of natural gas producers and marketers in the expanding and strategically important Asia Pacific region. — NYT