Unocal Corp. shareholders overwhelmingly accepted a cash-stock takeover bid from Chevron Corp. during a special meeting near Los Angeles. The transaction’s final value, excluding debt, was $17.9 billion.
The resulting company is Chevron, and Unocal shares were being dropped from the New York Stock Exchange. Unocal said 77.2% of eligible shares favored the Chevron buyout, and 2.6% opposed it. Of the shares actually voted, 96.6% approved.
The Aug. 10 meeting ended months of work for Chevron, which offered to acquire Unocal in April (OGJ Online, Apr. 4, 2005). Later, Chevron found itself in a bidding contest with China’s CNOOC Ltd., which made an unsolicited offer for Unocal on June 22 (OGJ, June 27, 2005, p. 25).
In response to the CNOOC offer, Chevron increased its bid (OGJ, July 25, 2005, p. 30). On Aug. 2, CNOOC abandoned its offer, citing politics as the reason. The offer had prompted opposition in the US Congress. The Chinese government is CNOOC’s majority owner.
Combined company
The combined company will produce 2.8 million boe/d and increase Chevron’s proved reserves by more than 15%.
Unocal’s key areas of operations are in the Asia-Pacific and Caspian regions and the Gulf of Mexico.
More than 20% of the combined company’s production will be from the Asia-Pacific region.
Charles Williamson, Unocal’s chairman and chief executive officer, joined Chevron in a transitional role until later this year. He became an executive vice- president of the corporation, assisting with the integration of the two companies.
“This touched a nerve,” Williamson told reporters on Aug. 10 when asked about the CNOOC offer. “It really became a platform in my mind for much more complex and greater China-United States issues than just CNOOC and Unocal. That we did not anticipate.” ✦
