Occidental Announces Expiration of Hart-Scott-Rodino Waiting Period for its Acquisition of CrownRock
Occidental (NYSE: OXY) has announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for its acquisition of CrownRock, L.P. has expired. This expiration satisfies the conditions for closing, except those to be fulfilled at the closing itself. The CrownRock acquisition is expected to close in August, following the completion of the financing marketing period outlined in the purchase agreement.
President and CEO Vicki Hollub expressed anticipation for closing the transaction and integrating CrownRock's team. Occidental is also progressing with a divestiture program aimed at enhancing its portfolio and optimizing shareholder returns.
- Expiration of Hart-Scott-Rodino waiting period clears a major regulatory hurdle for the CrownRock acquisition
- Acquisition expected to close in August 2024, indicating a swift completion of the deal
- Company is progressing with a divestiture program to optimize portfolio and shareholder returns
- Potential financial strain from the acquisition, as financing details are not disclosed
- Integration challenges may arise when incorporating CrownRock's team and assets
Insights
Occidental (NYSE: OXY) is nearing the final stages of its acquisition of CrownRock, L.P.. The Hart-Scott-Rodino waiting period's expiration signifies that regulatory antitrust concerns have been resolved, paving the way for the acquisition to close in August. This is a significant milestone because it greatly reduces uncertainty for investors.
From a financial perspective, this acquisition could be transformative. CrownRock's assets will enhance Occidental's portfolio, potentially improving cash flow and profitability. The company's reference to a divestiture program is notable. This implies Occidental plans to sell non-core assets to fund the acquisition or optimize its portfolio, which could positively impact their
Investors should monitor how the financing period progresses and look for updates on divestitures. The anticipated closing in August will be significant. In the short term, expect potential volatility in OXY’s stock as the market reacts to these developments. In the long term, if the acquisition and divestitures are managed well, Occidental could see enhanced financial stability and growth.
This news aligns with industry norms for M&A activities in the energy sector, which often involve strategic acquisitions paired with portfolio optimizations. Investors should remain cautious but optimistic about the potential for improved shareholder returns.
The expiration of the Hart-Scott-Rodino waiting period is a important step in Occidental's acquisition strategy. For retail investors, understanding the Hart-Scott-Rodino Act is useful. It requires companies to provide information about large deals to the Federal Trade Commission and the Department of Justice. The waiting period gives these bodies time to review the transaction for any anti-competitive effects. Its expiration indicates no significant antitrust issues were found, removing a major hurdle.
CrownRock's integration will likely bring operational synergies and enhanced market positioning. This move is consistent with Occidental’s strategy to scale through acquisitions and could significantly increase their market share in the energy sector. The CEO's comments about optimizing the portfolio suggest a focused shift toward higher-performing assets, which could mean a leaner, more efficient business model going forward.
Retail investors should note the timing and watch for completion updates. The acquisition could affect Occidental’s market perception, possibly leading to positive stock price movements if the market views the integration as a net positive. Long-term, the key will be how well Occidental manages the integration and executes its divestiture program.
The announcement that the Hart-Scott-Rodino waiting period has expired is a strong legal indicator that the acquisition is on solid ground regarding antitrust regulations. This period is a critical checkpoint, where companies must comply with regulatory scrutiny to ensure that the acquisition does not create unfair competition in the market.
Occidental's ability to clear this regulatory hurdle suggests robust due diligence and strategic planning. For retail investors, this means that the acquisition is less likely to face unexpected legal challenges moving forward, smoothing the path to a successful close.
The mention of conditions to close being satisfied, except those to be addressed at closing, is standard but important. Investors should understand that 'conditions to closing' often include final financing arrangements and possibly final approvals from other regulatory bodies. These final steps are usually procedural but still vital for the transaction's completion.
From a legal standpoint, this news is very positive, indicating that Occidental's acquisition strategy is proceeding as planned and without major legal obstacles. This reduces legal risk and enhances overall investment confidence.
HOUSTON, July 18, 2024 (GLOBE NEWSWIRE) -- Occidental (NYSE: OXY) today announced that the waiting period for its acquisition of CrownRock, L.P. (CrownRock, and such transaction, the CrownRock acquisition) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired.
With the expiration of the waiting period, the conditions to closing have been satisfied, other than those that are to be satisfied at closing. The CrownRock acquisition is expected to close in August, after completion of the financing marketing period contemplated by the CrownRock purchase agreement.
“We look forward to closing our transaction with CrownRock in August and welcoming their high-performing team into our organization,” President and Chief Executive Officer Vicki Hollub said. “We are progressing with the divestiture program that we believe will ultimately high-grade our portfolio and optimize returns for our shareholders.”
About Occidental
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon management to advance a lower-carbon world. Visit oxy.com for more information.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “will,” “should,” “could,” “may,” “anticipate,” “plan,” “expect,” "commit," "advance," or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause actual results to differ include, but are not limited to: the ultimate outcome of the CrownRock acquisition by Occidental; Occidental’s ability to consummate the CrownRock acquisition; the conditions to the completion of the CrownRock acquisition; Occidental’s ability to finance the CrownRock acquisition; Occidental’s indebtedness, including the indebtedness Occidental expects to incur and/or assume in connection with the CrownRock acquisition and the need to generate sufficient cash flows to service and repay such debt; Occidental’s ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transactions contemplated by the definitive agreement with CrownRock; the possibility that Occidental may be unable to achieve expected free cash flow accretion and other anticipated benefits within the expected time-frames or at all and to successfully integrate CrownRock’s operations with those of Occidental; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the CrownRock acquisition or public announcements regarding the CrownRock acquisition; the retention of certain key employees of CrownRock; potential litigation relating to the CrownRock acquisition that could be instituted against Occidental or its directors; rating agency actions and Occidental’s ability to access short- and long-term debt markets on a timely and affordable basis; Occidental’s ability to complete its contemplated divestiture program within the expected time-frames or at all; and general economic conditions that are less favorable than expected.
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s filings with the SEC, including Occidental’s 2023 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Contacts
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| Eric Moses 713-497-2017 eric_moses@oxy.com | R. Jordan Tanner 713-552-8811 investors@oxy.com |
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