ChevronTexaco today said it agreed to acquire Unocal for about $16.4 billion to bulk up its oil and natural gas reserves in the Asia Pacific region.
ChevronTexaco, a distant second behind Exxon Mobil in US oil production, beat out Italian oil group Eni, China National Offshore Oil Corp. and other potential suitors to acquire the ninth-ranked US oil and gas producer.
The deal gives ChevronTexaco a valuable portfolio of discovered and undeveloped deepwater oil and natural gas assets overseas, specifically in the Asia Pacific region, and comes on a day when crude rose above $58 a barrel.
Among its peers, Unocal has the largest exposure to Asia, a region that has reshaped the energy landscape over the past year because of its burgeoning demand for oil.
California-based Unocal operates or participates in exploration and production projects in Thailand, Indonesia, Myanmar, Bangladesh, The Netherlands, Azerbaijan, Congo and Brazil as well as the Gulf of Mexico.
Terms of the deal, structured as 75 per cent stock and 25 per cent cash, provide an overall value about $62 per share based on the closing price of ChevronTexaco stock on April 1st.
Unocal shareholders may elect to receive either 1.03 shares of ChevronTexaco stock or $65 in cash for each share of Unocal stock. ChevronTexaco will also assume about $1.6 billion in debt.
Shares of Unocal, which surged nearly 60 per cent since December on expectations of a takeover, fell more than 6 per cent Monday - based on a lack of premium in the deal from Friday's closing price.