Hess Shareholders Approve $53 Billion Sale to Chevron, but Hurdles Remain

Researched by Industrial Info Resources (Sugar Land, Texas)--Stockholders of Hess Corporation (NYSE:HES) (New York, New York) on Tuesday approved a $53 billion buyout by Chevron Corporation (NYSE:CVX) (San Ramon, California).

The prize in the purchase is Hess's 30% share in the Stabroek oil block in the waters off the Guyana coast. By 2027, the field is expected to produce 1.2 million barrels per day of oil. The other players there are Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas), at 45%, and Chinese oil giant CNOOC (Beijing) with the remaining 25% stake.

However, ExxonMobil and CNOOC are disputing the deal. ExxonMobil filed a contract arbitration claim in early March stating that it has first right of refusal in purchasing Hess's stake in the field. CNOOC added its claim to the action. The arbitration proceedings could drag into 2025. For more information, see April 9, 2024, article - Chevron Buyout of Hess Challenged by ExxonMobil, CNOOC.

Under the deal, Hess shareholders would own nearly 15% of 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," Hess Chief Executive Officer John Hess said in a press release.

According to Reuters, proxy firm Institutional Shareholder Services had recommended Hess shareholders vote to abstain on the deal to allow more time for details on the arbitration process with ExxonMobil to emerge.

However, proxy firm Glass, Lewis & Company (Glass Lewis) had advised Hess shareholders to vote for the proposed merger, saying "the strategic and financial merits of the proposed merger are sound and reasonable" and that "Hess shareholders will have the opportunity to participate in the potential future upside of the combined company."

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