June 12, 2024

Image for article titled Hess shareholders just approved Chevron's bid to buy the company

Image: Dado Ruvic (Reuters)

Hess shareholders approved the company’s acquisition by American oil giant Chevron on Tuesday. Reuters reports that a majority of shareholders gave the transaction a thumbs-up, though a vote tally wasn’t yet available. the deal The $53 billion deal is expected to give Chevron access to a major oil development that could significantly expand its asset base.

“We are very pleased that the majority of our stockholders recognize the compelling value of this strategic transaction and look forward to the successful completion of our merger with Chevron,” John Hess, son of Hess founder Leon Hess and the company’s CEO, said in a statement.

Chevron was optimistic about the deal when it launched the takeover attempt in October.

“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” Chevron CEO Mike Wirth said at the time.

CEO Hess said at the time that “our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.”

But ExxonMobil, Chevron’s biggest rival, launched a legal maneuver to cut Hess out of its rights to the Stabroek Block, a hugely valuable oilfield off the coast of Guyana. Between that and the potential for antitrust scrutiny in Washington, investors began getting cold feet.

Proxy advisor ISS had recommended that Hess shareholders abstain from a vote on the deal and push for a delay while it and Chevron figure out where things stand. “Investors are presently unable to make an informed assessment of the likely timetable for the [right of first refusal] arbitration process,” it wrote in a report. Bloomberg reports that Glass Lewis, on the other hand, said the deal is fine as it stands.

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