A quiet year of dealmaking erupted with a bang Monday morning with news that Chevron Corp. has reached a definitive agreement to acquire Noble Energy for $5 billion. Including Noble’s $8 billion debt load, the deal has a total value of $13 billion.
In the largest M&A deal in the oil patch in 2020 so far, Noble Energy GC Rachel Clingman chose Vinson & Elkins to lead the sale of the Houston-based firm.
A V&E team of 30 lawyers advised from Houston, led by partners Steve Gill and Doug McWilliams. The all-hands-on deck affair included partner Lande Spotswood and associates David Bumgardner, Michael Pascual, Houston Morgan, Josh Blankenship and Ben Sandlin.
Also advising: on tax were partners Lina Dimachkieh and Todd Way and associates Christine Mainguy and Dan Henderson; on compensation and benefits were partner David D’Alessandro and counsel Dario Mendoza and Julia Petty; on labor and employment were partner Tom Wilson and counsel Chris Bacon; on compliance were partner Fry Wernick and senior associate Brian Howard; on capital markets senior associate Jessica Lewis and associates Andrianna Frinzi and Billy Vranish; on antitrust and regulatory matters were partner Hill Wellford and counsel David Smith; oil & gas issues were handled by partner Bryan Loocke, senior associate Joclynn Townsend and associate Cesar Leyva; environmental issues were advised by partner Matt Dobbins and senior associate Jennifer Cornejo; and governance issues advised by partner Michael Holmes.
Paul, Weiss, Rifkind, Wharton & Garrison is advising Chevron.
J.P. Morgan is Noble’s financial advisor and Credit Suisse is advising Chevron.
Antitrust matters were handled by Shearman & Sterling’s Washington D.C. offices.
The pricing was based on Chevron’s closing price last Friday (July 17). Under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share.
The deal is Chevron’s first big play since last year’s $34 billion failed bid to buy Anadarko. Chevron lost out to a massive $55 billion counteroffer from Houston’s Occidental Petroleum, including the assumption of $22 billion in Anadarko debt.
Oxy management has since struggled with its own shareholders over the wisdom of the transaction, leading to efforts to shed some of the debt with a proposed spin-off of Anadarko’s pipeline business and a failed of Anadarko’s African assets to the French company Total Energy.
The acquisition of Noble Energy greatly expands Chevron’s upstream portfolio with low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean, as well as its acreage in the DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.
David Stover, Noble Energy chairman and CED said called the combination with Chevron “a compelling opportunity.”
“Over the last few years, we have made significant progress executing our strategic objectives, including driving capital efficiency gains onshore, advancing our offshore conventional gas developments and significantly reducing our cost structure,” Stover said.
Mark Curriden contributed to this report.