The U.S. Senate Majority Leader, Chuck Schumer (D-N.Y.), has called on the Federal Trade Commission (FTC) to reevaluate the proposed $53 billion merger between Chevron Corp CVX and Hess Corp HES.
What Happened: Schumer voiced his concerns over the merger on social media on Monday. He cautioned that the merger could empower oil majors to raise gas prices.
“I'm sounding the alarm against yet another proposed Big Oil merger—a $53B deal between Chevron and Hess It would give Big Oil more fuel to raise gas prices,” he said.
“Trump might be hosting dinners for Big Oil execs, but the FTC should side with consumers and pump the breaks on this deal.”
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At the time of publishing, Chevron and Hess are yet to respond to inquiries sent by Benzinga.
Why It Matters: In October, Chevron agreed to buy Hess for $53 billion or $171 per share in an all-stock transaction, representing a premium of 10.3% on a 20-day average based on closing prices on October 20, 2023. The total enterprise value of the deal, including debt, is $60 billion.
Schumer has consistently advocated for increased scrutiny of large oil mergers. Last November, as per Reuters, he and 22 other Democratic senators wrote to the FTC, warning that large-scale acquisitions by oil and gas giants like Exxon and Chevron could result in higher consumer prices.
In December, the FTC sought additional information and documentary material from Chevron and Hess in connection with the merger, according to another Benzinga report. The issuance of the second request extended the waiting period imposed by the HSR act until 30 days after Chevron and Hess have substantially complied with the Second Request.
Price Action: On Friday, Chevron’s stock closed at $165.80, and Hess’s stock closed at $160.35, according to Benzinga Pro. Both companies had reported earnings surprises in their first-quarter earnings of 2024, with Chevron reporting an EPS of $2.93 against an estimate of $2.68, and Hess reporting an EPS of $3.16 against an estimate of $1.69.
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