Chevron Retreats From Anadarko Bidding War

US major Chevron said May 9 it will not make a counterproposal to Occidental Petroleum’s latest offer for Anadarko Petroleum and will allow the four-day match period in its previously-announced merger agreement with Anadarko to expire on May 10.

Chevron now expects that Anadarko will terminate the merger agreement and pay it a $1bn termination fee. French Total’s proposed $8.8bn acquisition of Anadarko’s African assets is also now expected to proceed.

“Winning in any environment doesn’t mean winning at any cost,” Chevron CEO Michael Wirth said. “Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal.”

Chevron is already seeing robust production and cash flow growth, Wirth added, yielding higher investment returns and lower execution risk that will position the company to deliver superior value creation for its shareholders.

Consistent with that commitment, the company also said it would increase its share buyback rate by 25%, to an estimated $5bn/yr.