SAN RAMON, California – Chevron announced Monday morning that the company plans to acquire Noble Energy for $5 billion, making it the biggest energy deal since the beginning of the coronavirus pandemic.
In a statement Monday, the total enterprise value and transaction was $13 billion, which included pending debts from Noble Energy. Noble shareholders will also receive 100% of their stock totaling 58 million shares from Chevron, which began in the red Monday morning, dipping down from 2.7% according to CNN Business.
With Chevron’s acquisition, Noble Energy’s assets will expand from West Texas, Delaware and New Mexico, to Israel and West Africa, bringing growth opportunities, according to the statement.
The transaction was approved by Board of Directors of both companies and is expected to close in the fourth quarter of 2020, the company said. The acquisition is subject to approval from Noble Energy shareholders.
“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow.”
According to CNN Business, Noble Energy’s debt and “proven undeveloped reserves” became an attractive and cheap buy for Chevron.
Noble Energy will own 3% of the combined company, according to Chevron in a statement.