Chevron Corporation (NYSE:CVX) entered into a definitive agreement to acquire Hess Corporation (NYSE:HES) from The Vanguard Group, Inc., FMR LLC, BlackRock, Inc., State Street Corporation and others for $52.7 billion on October 22, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The total enterprise value, including debt, of the transaction is $60 billion. In aggregate, upon closing of the transaction, Chevron will issue approximately 317 million shares of common stock. The transaction price represents a premium of 10.3% on a 20-day average based on closing stock prices on October 20, 2023. In addition, John Hess is expected to join Chevron?s Board of Directors. The transaction would be accretive to cash flow per share and extends growth into 2030s. In case of termination, Hess will pay Chevron a termination fee of approximately $1.715 billion under certain circumstances provided in the merger agreement.

The acquisition is subject to Hess shareholder approval. It is also subject to regulatory approvals, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the effectiveness of the Registration Statement on Form S-4 to be filed by Chevron pursuant to which the shares of Chevron common stock to be issued in connection with the Merger will be registered with the U.S. Securities and Exchange Commission and the authorization for listing on the New York Stock Exchange of the shares of Chevron common stock to be issued in connection with the Merger and other customary closing conditions. The transaction has been unanimously approved by the Boards of Directors of both companies. As on December 7, 2023, HSR Act waiting period is further extended by 30 days after FTC's second review request. Hess shareholders will hold a special meeting on May 28, 2024 to approve the transaction. The transaction is expected to close by the end of the first half of 2024. As per updated filing, transaction is expected to close in middle of 2024. Morgan Stanley & Co. LLC is acting as lead financial advisor to Chevron. Evercore also advised Chevron. Kyle Seifried,Stan Richards, Scott Barshay, John Kennedy, Christodoulos Kaoutzanis, Caith Kushner and Manuel Frey, Lawrence Witdorchic, Brian Krause, Claudine Meredith-Goujon, and Peter Fisch of Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal advisors to Chevron. Goldman Sachs & Co. LLC is acting as lead financial advisor and fairness opinion provider to Hess. J.P. Morgan Securities LLC also advised Hess. Martin Lipton, Karessa L. Cain, Zachary S. Podolsky, Nelson O. Fitts, Jeannemarie O'Brien, Emily D. Johnson and T. Eiko Stange of Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Hess. Stuart Rogers of Alston & Bird LLP represented Morgan Stanley & Co. LLC as financial advisor. David A. Higbee, Ben Gris and Jonathan Cheng of Shearman & Sterling LLP is acting as legal advisor to Chevron in the transaction. Morgan Stanley and Paul, Weiss, Rifkind, Wharton & Garrison also provided due diligence services. Computershare, Inc. acted as transfer agent for Hess and Computershare Shareowner Services LLC acted as transfer agent for Chevron. Hess has retained MacKenzie Partners, Inc. to assist in the solicitation of proxies for an estimated fee of approximately $40,000. Hess has agreed to pay Goldman Sachs a transaction fee of $80 million, $4 million of which became payable upon the announcement of the merger, and the remainder of which is contingent upon consummation of the merger.