20 October 2000
Chevron Corporation proposed a $34 billion purchase of Texaco Inc., to form the world’s fourth largest energy company which would operate under the name of ChevronTexaco Corporation.
The combined company expects to cut approximately 7% of its work force (4000 workers) and achieve annual savings of $1.2 billion. The new company would have reserves of 11.2 billion barrels of oil equivalent (BOE), daily production of 2.7 million BOE, assets of $77 billion, and operations throughout the world. In the United States, ChevronTexaco would be the nation’s third largest producer of oil and gas, with production of 1.1 million BOE per day, and would hold the nation’s third largest reserve position, with 4.2 billion BOE of proved reserves.
In the merger, Texaco shareholders would receive 0.77 shares of Chevron common stock for each share of Texaco common stock they own, and Chevron shareholders would retain their existing shares. As a result of the merger, Chevron shareholders would own approximately 61% of the combined equity, and Texaco shareholders would own about 39%. The combined company would have an enterprise value of about $100 billion.
The merger is subject to approval by both companies’ shareholders and the US government. It is expected that ChevronTexaco will have to sell a number of refineries and gas stations to receive the regulatory approval.
More information on the merger is available from the ChevronTexaco web site.