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Saturday, June 15, 2024
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Hess Investors to Vote on Chevron Deal Amid Postponement Calls

Hess Corporation shareholders are scheduled to cast their ballots on Tuesday regarding the proposed $53 billion acquisition by Chevron Corporation. This vote comes amidst a growing chorus of investors urging a delay to secure a more favorable deal for Hess shareholders.

The potential merger has faced complications due to an arbitration claim filed by ExxonMobil and China National Offshore Oil Corporation (CNOOC) against the sale. This claim casts uncertainty over the status of a key Hess asset – its non-operated stake in the Guyana oil field. The Guyana field is considered one of the world’s largest crude oil discoveries of the past decade, making its ownership a crucial factor in the deal’s value.

Chevron has publicly stated its intention to withdraw from acquiring the arbitration claim rules against Hess. This adds significant pressure to the upcoming shareholder vote.

Financial institutions like Vanguard Group and BlackRock, which hold a combined 15% stake in Hess, could significantly influence the outcome. Proxy advisory firms, entities that provide voting recommendations to institutional investors, have presented mixed views. Institutional Shareholder Services (ISS) recommends abstention and has urged Hess to offer additional incentives to shareholders due to the delay in the deal.

Market analysts estimate that roughly 40% of Hess shareholders might abstain from voting, effectively acting as a vote against the merger. This highlights the growing skepticism surrounding the deal and the potential for a close vote.

However, Hess’s leadership remains confident in the deal’s long-term benefits for shareholders. They believe the combined entity will be a stronger competitor in the global energy market and that the arbitration claim will ultimately be resolved in their favor.

The upcoming vote represents a critical juncture for both Hess and Chevron. Approval by shareholders would pave the way for the merger’s completion, while a rejection could force both companies to explore alternative strategies.

In conclusion, the Hess-Chevron merger faces a crucial test with the upcoming shareholder vote. Investor concerns and the ongoing arbitration case introduce significant uncertainty into the deal’s future. The outcome of the vote will have far-reaching implications for the strategic direction of both companies within the ever-evolving energy landscape.

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