Antitrust regulators are set to prevent Hess Corp. HES CEO John Hess from joining the board of Chevron Corp. CVX as part of a $53-billion merger deal.
What Happened: Chevron has tentatively agreed to this condition to secure approval for the merger, The Wall Street Journal reported on Friday, citing sources familiar with the matter.
The deal still faces an arbitration case involving Exxon Mobil Corp. XOM and China National Offshore Oil Corporation over rights to a key oil project in Guyana.
The decision is a setback for John Hess, who was anticipated to join Chevron's board post-merger. However, he is expected to serve in an advisory capacity with Chevron, according to the report.
The Federal Trade Commission had paused its antitrust review of the Chevron-Hess deal until the arbitration process concluded.
A significant arbitration hearing is scheduled for May 2025. The FTC has increased scrutiny on oil and gas mergers, previously barring former Pioneer Natural Resources CEO Scott Sheffield from joining Exxon's board under similar conditions, according to the report.
FTC, Chevron Corp, and Hess Corp did not immediately respond to Benzinga's request for comment.
Why It Matters: The decision to block John Hess from joining Chevron's board is a significant development in the ongoing merger between the two oil giants.
The merger, valued at $53 billion, had already received approval from Hess shareholders in May. However, regulatory hurdles and arbitration issues have delayed its finalization.
In recent months, Chevron has been actively navigating regulatory landscapes and strategic decisions. For instance, the company ruled out taking an equity stake in Woodside Energy Group Limited's upcoming acquisition of Driftwood LNG in Louisiana, opting instead to monetize its U.S. gas directly to the market.
Additionally, Chevron CEO Michael Wirth has publicly criticized President Joe Biden‘s administration’s pause on liquefied natural gas export decisions, arguing that it could lead to higher energy costs and jeopardize supplies for America’s European allies.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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