Hess Corp. (NYSE:HES) shareholders have approved Chevron Corp.’s (NYSE:CVX) $53 billion takeover, despite concerns from some prominent investors about an ongoing dispute with Exxon Mobil Corp. (NYSE:XOM) over a key asset.
Hess announced the approval during a meeting on Tuesday. Although the company’s shares initially dipped, they soon recovered, rising as much as 1%.
“We are very pleased that the majority of our stockholders recognize the compelling value of this strategic transaction,” stated Chief Executive Officer John Hess.
This approval marks a significant victory for Chevron and its CEO, Mike Wirth, who aimed to secure a stake in the largest oil discovery of the past decade by acquiring Hess and its 30% interest in a Guyanese field. In the days leading up to the vote, John Hess, the longest-serving major oil executive, personally lobbied shareholders to support the deal.
The transaction still requires approval from the U.S. Federal Trade Commission and resolution of the ongoing arbitration case brought by Exxon over control of Hess’ interest in the Guyanese field. Exxon has indicated that the proceedings may extend into 2025.
Several Hess investors, including HBK Capital Management Group LP and D.E. Shaw & Co., had announced plans to abstain from the vote, arguing that the takeover premium did not sufficiently account for the risks from the arbitration. Exxon has claimed a right-of-first-refusal over Hess’s stake in the 11 billion-barrel field off the coast of Guyana, which is operated and 45% owned by Exxon.
For Chevron, acquiring Hess’ assets is a strategic move to address investor concerns about the California driller’s long-term growth prospects.
This vote is also a significant milestone for John Hess, 70, whose father founded the company nearly a century ago. John Hess, who controls roughly 10% of the company’s common stock, will join Chevron’s board following the completion of the deal.
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