Chevron agrees to $5B all-stock deal for Noble Energy

The deal has an enterprise value of $13B

Chevron Corp. has agreed to buy Noble Energy Inc. for $5 billion in an all-stock deal.

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The transaction, which is the largest energy deal since the coronavirus pandemic began, values Noble at $10.38 a share or a 7.45 percent premium to Friday’s closing price.

Noble shareholders will receive 0.1191 Chevron shares for each Noble share owned. The enterprise value of the deal, which includes debt, is $13 billion.

Ticker Security Last Change Change %
CVX CHEVRON CORP. 174.27 +1.55 +0.90%
NBL n.a. n.a. n.a. n.a.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” Chevron CEO Michael Wirth said in a statement. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources.”

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The deal will increase Chevron's oil and gas reserves at year-end 2019 by 18 percent to an average acquisition cost of less than $5 per barrel of oil equivalent and enhance Chevron's presence in both the DJ Basin and the Permian Basin as well as in Israel and West Africa.

Chevron expects $300 million of run-rate operating and other cost synergies within a year of the deal's closing, which is expected to occur in the fourth quarter of 2020. Once the deal is completed, Chevron will issue approximately 58 million shares. Noble shareholders will own about 3 percent of the combined company.

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Credit Suisse served as financial adviser to Chevron while J.P. Morgan advised Noble Energy.