Chevron's CFO said the company's all-stock deal to acquire Noble Energy is like a hedge against volatile oil prices amid the coronavirus pandemic
By Nina Trentmann Close Nina Trentmann July 20, 2020 7:56 pm ET Chevron Corp. ’s $5 billion all-stock deal to acquire Noble Energy Inc. acts like a hedge against volatile oil prices amid the continuing coronavirus pandemic, the oil major’s chief financial officer Pierre Breber said.
Issuing new equity is attractive to both Chevron and Noble shareholders, Mr. Breber said. Chevron won’t take on new debt, as it will simply add to its 1.9 billion of shares already in circulation. And due to the value of Noble’s assets, the dilution for existing Chevron shareholders will be limited, analysts said.
Newsletter Sign-up CFO Journal The Morning Ledger provides daily news and insights on corporate finance from the CFO Journal team. Chevron in recent years struck several deals that had equity-components. Its last all-stock deal was its acquisition of Texaco Inc. in 2000, according to a spokesman.Noble’s stock fell from about $37 in May 2018 to a low of approximately $3 in March as global oil markets tumbled amid concerns about the economic impact of the coronavirus pandemic. Noble’s share price has recovered but was 70% off its 2018 high on Monday, closing at $10.18.
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