Occidental Petroleum Corporation entered into a definitive agreement whereby Occidental will acquire Anadarko Petroleum Corporation (NYSE: APC) for $59.00 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock, in a transaction valued at $57 billion, including the assumption of Anadarko’s debt.

“This exciting transaction will create a global energy leader with a world-class portfolio, proven operational capabilities and industry leading free cash flow metrics,” said Vicki Hollub, President and Chief Executive Officer of Occidental. “This transaction further establishes Occidental as a premier operator in prolific global oil and gas regions with the ability to deliver production growth of 5% through investment in projects with industry-leading returns. With greater scale, an unwavering focus on driving profitable growth, and our commitment to growing our dividend, we are creating a unique platform to drive meaningful shareholder value.”

The transaction provides compelling strategic and financial rationale for all stakeholders as it:

- Applies Occidental’s proven operational and technical excellence to Anadarko’s portfolio;
- Enhances Permian leadership position of Occidental and bolsters portfolio with additional free cash flow generating assets;
- Creates a global energy leader with enhanced scale and expertise to lead energy into a low carbon future;
- Provides expected accretion year one, generating even stronger financial returns; and
- Presents opportunities for high impact synergies and capital spending efficiency.

Total S.A. Transaction

As announced on May 5, 2019, Occidental has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total S.A. (NYSE: TOT) for $8.8 billion. The sale is contingent upon Occidental completing its acquisition of Anadarko, and would be expected to close simultaneously or as soon as reasonably practicable afterwards.

Financing

Occidental expects to fund the cash portion of the consideration through a combination of cash from its balance sheet and fully committed debt and equity financing, including proceeds from the previously announced $10 billion equity investment by Berkshire Hathaway, Inc. The transaction is not subject to a financing condition.

Occidental is confident in its ability to realize the full potential of the transaction while maintaining a strong balance sheet, investment grade credit rating and its current dividend. Occidental expects to reduce debt over the next 24 months through free cash flow growth, realizing identified synergies and executing a planned portfolio optimization strategy with $10-15 billion of divestitures over the next 12-24 months; $8.8 billion of which has already been agreed through the transaction with Total.

Integration

Glenn Vangolen, Occidental’s Senior Vice President of Business Support, will lead an integration team that will include representatives from both Occidental and Anadarko.

Approvals and Timing

Occidental’s acquisition of Anadarko has been unanimously approved by the Boards of both companies, and the Anadarko Board of Directors unanimously recommends that Anadarko shareholders approve the transaction with Occidental.

The transaction is expected to close in the second half of 2019 and is subject to customary closing conditions, including approval from Anadarko’s shareholders and the receipt of regulatory approvals.

Advisors

Bank of America Merrill Lynch and Citi are acting as Occidental’s financial advisors. Cravath, Swaine & Moore LLP is serving as legal counsel.

About Occidental

Occidental (NYSE: OXY) is an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America. Headquartered in Houston, Occidental is one of the largest U.S. oil and gas companies, based on equity market capitalization. Occidental’s midstream and marketing segment purchases, markets, gathers, processes, transports and stores hydrocarbons and other commodities. The company’s wholly owned subsidiary OxyChem manufactures and markets basic chemicals and vinyls.

About Anadarko

Anadarko Petroleum Corporation's (NYSE: APC) mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2018, the company had approximately 1.47 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies.

About Total

Total is a major energy player, which produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.