US FTC allows Chevron-Hess deal, bars John Hess from board
2024.09.30 11:15
By Jody Godoy
NEW YORK (Reuters) -The U.S. Federal Trade Commission allowed Chevron (NYSE:)’s $53 billion purchase of Hess Corp (NYSE:) on Monday, in an order that barred Hess CEO John Hess from Chevron’s board.
The FTC’s order leaves Exxon Mobil (NYSE:)’s challenge to the deal, which is expected to stretch deep into next year, as its final hurdle.
The proposed merger included a Chevron board seat for Hess when it was first announced last October, and the FTC sent a second information request to Chevron two months later.
Hess had communicated publicly and privately with members of the Organization of the Petroleum Exporting Countries (OPEC) group of oil producers, and encouraged high-level representatives of the group “in their stated mission to stabilize global oil markets,” the FTC said on Monday
Allowing him to join Chevron’s board “would amplify Mr. Hess’s supportive messaging to OPEC and others, thereby meaningfully increasing the likelihood that Chevron would align its production with OPEC’s output decisions to maintain higher prices,” the FTC said.
A spokesperson for Hess did not immediately reply to a request for comment.
Exxon Mobil and CNOOC (NYSE:) Ltd, Hess’s partners in a Guyana joint venture, are challenging the deal by claiming a right of first refusal to any sale of Hess’s Guyana assets, the prize in the proposed merger.
A three-judge arbitration panel is due to consider the case next May. Chevron and Hess say a decision is expected by August, while Exxon Mobil expects it by September 2025.
John Hess will be allowed to advise Chevron on discussions with Guyanese government officials, according to the FTC order.
The proposed all-stock acquisition is one of the largest in a consolidating U.S. oil and gas industry where several multibillion-dollar deals have been disclosed.
