Occidental Petroleum Corp said it will look to counter Chevron Corp’s $50 billion takeover of Anadarko Petroleum Corp with a $57 billion bid.
The deal if it goes through, would make Occidental the largest producer in the lucrative Permian shale basin, with total production of 533,000 barrels of oil equivalent production per day, the company said.
Occidental’s $76 per share offer comprises $38 in cash and 0.6094 of its shares. The offer represents a premium of 19 percent to Anadarko’s closing price on Tuesday and 62 percent to the closing price on April 11, the day before Chevron made its bid.
Under Chevron’s bid, Anadarko shareholders are set to receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.
Occidental expects the deal to add to cash-flow and free cash flow in the first year, and deliver $2 billion of annual cost synergies and $1.5 billion of annual capital reductions.
Occidental said it has in place committed financing for the cash portion of the acquisition price.
Data compiled by Reuters News showed that shares of Anadarko were up about 10 percent at $70.30 premarket, while Occidental was trading down 4.5 percent at $59.55. Chevron’s shares fell 0.5 percent after the announcement.