< Will the Scrushy jury deliberations take longer than the Scrushy trial? | Main | This is really, really not going well >
June 23, 2005
Big Chinese company takes on Chevron over Unocal
Cnooc Ltd., China's third-largest oil company and it's major explorer of offshore oil and gas, yesterday made an unsolicited $18.5 billion cash bid for El Segundo, CA.-based Unocal Corp. The bid is attempting to scuttle the earlier $16.5 billion bid that San Ramone, CA.-based Chevron Corp. made for Unocal in April.
If successful, Cnooc's bid would be the largest foreign acquisition ever attempted by a Chinese company and would be the first time that a Chinese and U.S. company have competed in a takeover battle. Cnooc had been considering making a bid for Unocal in April, but backed off at the last minute.
Inasmuch as a good case can be made that Chevron's bid was over-priced, Cnooc's offer for Unocal reflects that China's government (about a 70% owner of Cnooc) will pay a high price to gain direct control over more energy assets to fuel its booming economy. Nearly half of Unocal's reserves -- the oil and natural gas equivalent of about 1.75 billion barrels -- consists of natural gas in Asia. Cnooc is offering $67 a share for Unocal, and would have to pay Chevron a $500 million breakup fee and assume Unocal's $1.6 billion in debt.
Although Cnooc's bid will undoubtedly raise political concerns in Washington, prominent U.S. executives advised political interests to remain calm. The Wall Street Journal reported that Exxon Mobil Corp. Chief Executive Lee Raymond said it would be a "big mistake" for the U.S. government to block Cnnoc's bid. "You have to have free trade. If you start to put inefficiencies in the system, all of us eventually pay for that."
Posted by Tom at June 23, 2005 04:27 AM
Trackback Pings
TrackBack URL for this entry:
http://mtcgi.kir.com/mt-trackbk.cgi/2086
Listed below are links to weblogs that reference Big Chinese company takes on Chevron over Unocal:
� It's official -- CNOOC makes competitive bid for Unocal from Big Cat Chronicles
Just time for a quick post on this. Just out from the Wall Street Journal,
[Read More]<...
Tracked on June 23, 2005 09:51 PM
Comments
Post a comment
Thanks for signing in, . Now you can comment. (sign out)
(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)