US energy giant and LNG producer Chevron has agreed to buy compatriot oil and gas firm Hess in an all-stock transaction valued at $53 billion.
Under the deal, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share, according to a Chevron statement.
The total enterprise value, including debt, of the transaction is $60 billion, it said.
This is the second giant deal in the US oil and gas industry this month after ExxonMobil entered a definitive agreement with Pioneer for an all-stock transaction valued at $59.5 billion.
Chevron, the operator of the Wheatstone and Gorgon LNG plants in Australia, said that the acquisition of Hess upgrades and diversifies the company’s “already advantaged” portfolio.
The Stabroek block in Guyana is an “extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade,” it said.
Also, Hess’ Bakken assets add “another leading US shale position to Chevron’s DJ and Permian basin operations and further strengthen domestic energy security.”
Chevron said it expects the combined company to grow production and free cash flow “faster and for longer” than Chevron’s current five-year guidance.
In addition, Chevron expects that John Hess will join its board of directors.
Chevron said that the boards of directors of both companies approved the transaction.
The acquisition remains subject to Hess shareholder approval and also to regulatory approvals and other customary closing conditions.
Chevron expects to close the deal in the first half of 2024.