SAN RAMON, Calif. - Chevron Corporation (NYSE: NYSE:CVX) announced today that the Federal Trade Commission (FTC) has completed its antitrust review of the company's proposed merger with Hess Corporation (NYSE: NYSE:HES), signaling a critical step toward finalizing the deal. This development satisfies a major condition required for the completion of the merger.
Chairman and CEO of Chevron, Mike Wirth, expressed confidence in the merger's benefits for shareholders, the industry, and Guyana, where Chevron will enhance its asset portfolio. The merger, which received approval from Hess shareholders in May 2024, is still subject to other closing conditions, including the resolution of ongoing arbitration relating to the Stabroek Block joint operating agreement.
As part of the merger arrangements, John Hess, CEO of Hess Corporation, will not join the Chevron Board of Directors. Instead, Hess will serve as an advisor to Chevron, focusing on government relations and social investments in Guyana, as well as supporting the Salk Institute's Harnessing Plants Initiative.
The merger's completion is anticipated to add to Chevron's already robust portfolio of energy assets. Chevron is a leading integrated energy company with a focus on producing crude oil and natural gas, manufacturing transportation fuels, lubricants, petrochemicals, and additives, and investing in technologies to enhance its business and the broader industry.
The company is also committed to growing its oil and gas business with a lower carbon footprint and expanding into renewable fuels, carbon capture, hydrogen, and other emerging low-carbon technologies. Chevron's confidence in the merger's eventual completion is underscored by the expectation that the arbitration process will affirm its position.
The information regarding the merger and the FTC's review is based on a press release statement from Chevron Corporation.
In other recent news, the U.S. Federal Trade Commission has given Chevron the green light for its $53 billion acquisition of Hess Corporation, on the condition that Hess CEO, John Hess, will not join Chevron's board post-merger. This development brings the deal closer to completion, despite ongoing objections from Exxon Mobil (NYSE:XOM) and CNOOC (NYSE:CEO) Limited, who have a joint venture with Hess in Guyana. The matter is set to be arbitrated in May 2025.
Simultaneously, Chevron, along with Exxon Mobil and ConocoPhillips (NYSE:COP), has been disclosed to have made payments exceeding $42 billion to foreign governments, a figure significantly larger than their payments within the United States. This information was revealed under a new Securities and Exchange Commission regulation aimed at increasing transparency in overseas financial dealings of these companies.
In other developments, the Public Utility Commission of Texas has approved the Permian Basin Reliability Plan, a move aimed at enhancing power grid infrastructure in the Permian Basin. This decision follows projections of a significant rise in electric load demand in the area by major industry players, including Chevron, ExxonMobil, and ConocoPhillips.
Lastly, Hurricane Helene has caused a disruption in energy facilities along the U.S. Gulf Coast, leading to a reduction in operations and initiation of evacuations. Energy companies, including Chevron, have taken various measures in response to the hurricane's threat, including evacuating personnel and shutting down production at multiple platforms.
InvestingPro Insights
As Chevron Corporation (NYSE: CVX) moves closer to finalizing its merger with Hess Corporation, InvestingPro data provides additional context to the company's financial position and market performance.
Chevron's market capitalization stands at $268.01 billion, reflecting its position as a major player in the oil and gas industry. This is further supported by an InvestingPro Tip highlighting Chevron as a "prominent player in the Oil, Gas & Consumable Fuels industry."
The company's P/E ratio of 14.42 suggests that investors are willing to pay a moderate premium for Chevron's earnings, which could be influenced by the anticipated benefits of the Hess merger. Additionally, Chevron's revenue for the last twelve months as of Q2 2024 was $195.15 billion, demonstrating the company's substantial operational scale.
An important InvestingPro Tip notes that Chevron "has raised its dividend for 36 consecutive years." This impressive track record of dividend growth aligns with the company's current dividend yield of 4.48%, which may appeal to income-focused investors. The company's commitment to shareholder returns is further evidenced by its 7.95% dividend growth over the last twelve months.
For those interested in a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 10 more InvestingPro Tips available for Chevron, providing a deeper understanding of the company's financial health and market position as it approaches this significant merger.
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