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Monday April 04, 02:09
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ChevronTexaco moves for leadership by buying Unocal
(by Helen Snow)
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ChevronTexaco Corp., the nation’s second biggest oil concern, is acquiring rival Unocal Corp., number nine in the U.S. oil and gas exploration and production industry, for about $16.4 billion in cash and stock, the announcement came yesterday. ChevronTexaco is reported to assume $1.6 billion of debt in the deal.
Unocal, based in El Segundo, Calif., surely seems to be an attractive takeover target as a number of its assets in Southeast Asia could bring sufficient profit from the growing demand of China and India.
ChevronTexaco’s bid contains the terms on issue of about 210 million shares and paying nearly $4.4 billion in cash, about $62 per share.
Unocal shareholders will make chose between offers: 1.03 shares of ChevronTexaco stock or $65 in cash for each Unocal share. At the moment Unocal has about 270.6 million shares outstanding.
Unocal shares fell 6 % closing at $60.50 in recent premarket activity.
ChevronTexaco, based in San Ramon, Calif., expects the transaction to result in income of more than $2 billion. Annual savings are forecast to exceed $325 million before taxes.
The deal, approved by Unocal shareholders and regulatory bodies, is expected to come into effect in six months.
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