Occidental Petroleum wins the nearly $40 billion bidding war for Anadarko Petroleum, while Chevron said it will bow out and doesn’t want to overpay. Oxy was determined to acquire Anadarko and its assets in West Texas' booming Permian Basin. The win will make Oxy as the Permian's top producer for the foreseeable future.
Initially Anadarko agreed to be bought by Chevron for $33 billion bid at $65 per share, but Oxy kept sweetening the deal until Anadarko could no longer say no for an offer of about $38 billion at $76 per share. Oxy critically increased the cash portion of its cash-and-stock bid from 25 percent to nearly 80 percent in order to assuage the concerns of many investors and to avoid a shareholder vote.
"Winning in any environment doesn't mean winning at any cost," said Chevron Chief Executive Michael Wirth. "Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal."
"We look forward to signing a merger agreement with Anadarko and realizing value for our shareholders as soon as possible," Oxy said Thursday in a prepared statement after Chevron backed out. Chevron walks away with a $1 billion breakup fee.