Anadarko buys two gas companies for $23.3 billion
Posted: 26 June 2006
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Oil and gas producer Anadarko Petroleum Corp said it is to acquire Kerr-McGee Corporation and Western Gas Resources, in separate all-cash transactions totalling $21.1 billion, plus the assumption of debt estimated at $2.2 billion.
Anadarko will buy Oklahoma City-based oil and gas producer Kerr McGee Corp for $70.50 per share - a 40% premium over Thursday's closing price for a total of $16.4 billion plus debt of $1.6 billion.
Independent natural gas explorer Western Gas, on the other hand, will be bought for $61 per share, a 49% premium over Thursday's closing price for a total of $4.7 billion plus debt of $600 million
Kerr-McGee's core properties are located in the deepwater Gulf of Mexico and onshore in Colorado and Utah.
In addition to its extensive, rapidly growing US portfolio, Kerr-McGee produces oil and is continuing to develop and explore offshore China, has made discoveries and is pursuing the development of fields on the North Slope of Alaska and offshore Brazil, and is exploring offshore Austr alia, West Africa and the islands of Trinidad and Tobago.
"Two years ago, we unveiled a strategy that included a solid North American foundation of onshore resource plays, a growing deepwater Gulf of Mexico program and an expanding international portfolio," Anadarko Chairman, President and CEO Jim Hackett said.
"Kerr-McGee and Western Gas Resources strengthen Anadarko's position on all three counts, with captured growth projects that are consistent with our core skill sets. The transactions enable us to create a more focused operating strategy with a larger and lower-risk asset base."
Anadarko will finance the acquisitions through a $24 billion, 364-day committed acquisition facility provided by UBS, Credit Suisse and Citigroup. Anadarko plans to use proceeds from asset sales, free cash flow from operations and the issuance of equity to reduce debt over the next 18 to 24 months.
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