Hess Corporation Receives Stockholder Approval for Proposed Merger with Chevron
Hess (NYSE: HES) announced that its stockholders have approved the proposed merger with Chevron During a special meeting, a majority of Hess's outstanding shares voted in favor of the merger. CEO John Hess highlighted that the merger will create a leading integrated energy company capable of delivering significant shareholder value. The final voting results will be documented in a Form 8-K filed with the U.S. SEC. The merger does not require approval from Chevron's stockholders but remains subject to other closing conditions, including regulatory approvals and arbitration outcomes related to the Stabroek Block joint operating agreement. Both companies aim to complete the merger promptly.
- Stockholder approval received for Hess's merger with Chevron.
- Majority of outstanding Hess shares voted in favor of the merger.
- Merger expected to position the combined entity as a premier integrated energy company.
- Anticipated significant shareholder value creation from the merger.
- No approval needed from Chevron stockholders, simplifying the merger process.
- Merger completion is still subject to regulatory approvals under the Hart-Scott-Rodino Act.
- Ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block could delay the merger.
Insights
The announcement that Hess Corporation's stockholders have approved the merger with Chevron is a significant development. This merger is expected to create a more powerful integrated energy company, which might result in enhanced financial stability and increased operational efficiency. For retail investors, this could mean potential long-term value appreciation as the combined entity could leverage Chevron's extensive asset base and substantial cash flows.
However, there are several factors to consider. The merger is still contingent upon the satisfaction of various closing conditions, including regulatory approvals and the resolution of ongoing arbitration proceedings. These uncertainties could pose risks and might delay the merger completion. Investors should keep an eye on further announcements regarding these issues.
Historically, mergers in the energy sector have led to short-term volatility but often result in long-term gains due to cost synergies and expanded market reach. As a retail investor, it is important to stay informed about the regulatory landscape and any developments in the arbitration proceedings, as these will heavily influence the merger's timeline and success.
From a legal standpoint, the approval of stockholders is a key milestone in the merger process between Hess Corporation and Chevron. However, significant legal hurdles remain, namely the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the resolution of arbitration proceedings concerning preemptive rights in the Stabroek Block joint operating agreement. These legal conditions, if not resolved favorably, could potentially derail or delay the merger.
It's important to note that regulatory scrutiny is particularly high in large mergers within the energy sector due to the potential for reduced competition. Investors should be aware of the antitrust implications and monitor any statements from the Federal Trade Commission or the Department of Justice regarding this merger.
The arbitration concerning the Stabroek Block could also introduce complications if the resolution is not in favor of the merger terms. This block is a highly valuable asset and any unfavorable arbitration outcome could affect the perceived value of the merger for Chevron.
“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,” CEO John Hess said. “Together we will be positioned as a premier integrated energy company, with the leadership, asset portfolio and financial resources to deliver significant shareholder value for years to come.”
The final voting results on the proposals voted on at the special meeting will be set forth in a Form 8-K that Hess will file with the
No approval of Chevron stockholders is required in connection with the merger. Completion of the merger remains subject to other closing conditions, including expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfactory resolution of ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement. Chevron and Hess are working to complete the merger as soon as practicable.
FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements and other forward-looking statements in this document by words such as “expects,” “focus,” “intends,” “anticipates,” “plans,” “targets,” “poised,” “advances,” “drives,” “aims,” “forecasts,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “commits,” “on track,” “objectives,” “goals,” “projects,” “strategies,” “opportunities,” “potential,” “ambitions,” “aspires” and similar expressions, and variations or negatives of these words, but not all forward-looking statements include such words.
Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the potential transaction, including the expected time period to consummate the potential transaction, and the anticipated benefits (including synergies) of the potential transaction. All such forward-looking statements are based upon current plans, estimates, expectations, and ambitions that are subject to risks, uncertainties, and assumptions, many of which are beyond the control of Chevron and Hess, that could cause actual results to differ materially from those expressed in such forward-looking statements. Key factors that could cause actual results to differ materially include, but are not limited to the risk that regulatory approvals are not obtained or are obtained subject to conditions that are not anticipated by Chevron and Hess; potential delays in consummating the potential transaction, including as a result of regulatory proceedings or the ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement; risks that such ongoing arbitration is not satisfactorily resolved and the potential transaction fails to be consummated; Chevron’s ability to integrate Hess’ operations in a successful manner and in the expected time period; the possibility that any of the anticipated benefits and projected synergies of the potential transaction will not be realized or will not be realized within the expected time period; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; risks that the anticipated tax treatment of the potential transaction is not obtained; unforeseen or unknown liabilities; customer, regulatory and other stakeholder approvals and support; unexpected future capital expenditures; potential litigation relating to the potential transaction that could be instituted against Chevron and Hess or their respective directors; the possibility that the potential transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the effect of the announcement, pendency or completion of the potential transaction on the parties’ business relationships and business generally; risks that the potential transaction disrupts current plans and operations of Chevron or Hess and potential difficulties in Hess employee retention as a result of the potential transaction, as well as the risk of disruption of Chevron’s or Hess’ management and business disruption during the pendency of, or following, the potential transaction; changes to the company’s capital allocation strategies; uncertainties as to whether the potential transaction will be consummated on the anticipated timing or at all, or if consummated, will achieve its anticipated economic benefits, including as a result of risks associated with third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the potential transaction and that are not waived or otherwise satisfactorily resolved; changes in commodity prices; negative effects of the announcement of the potential transaction, and the pendency or completion of the proposed acquisition on the market price of Chevron’s or Hess’ common stock and/or operating results; rating agency actions and Chevron’s and Hess’ ability to access short- and long-term debt markets on a timely and affordable basis; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; labor disputes; changes in labor costs and labor difficulties; the effects of industry, market, economic, political or regulatory conditions outside of Chevron’s or Hess’ control; legislative, regulatory and economic developments targeting public companies in the oil and gas industry; and the risks described in (i) Part I, Item 1A “Risk Factors” of (a) Chevron’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 and (b) Hess’ Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, (ii) Hess’ definitive proxy statement in connection with the potential transaction, and (iii) other filings of Chevron and Hess with the
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at http://www.hess.com.
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For Hess Corporation
Investor Contact:
Jay Wilson
(212) 536-8940
jrwilson@hess.com
Media Contacts:
Lorrie Hecker
(212) 536-8250
lhecker@hess.com
Liz James
FGS Global
(281) 881-5170
liz.james@fgsglobal.com
Source: Hess Corporation
FAQ
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