Chevron announces $53bn all-stock acquisition of Hess Corp

BY Richard Summerfield

Chevron Corp has announced that it will acquire its smaller rival Hess Corp in a $53bn all-stock deal which will boost the company’s presence in oil-rich Guyana.

Under the terms of the deal, Chevron will acquire the company for $171 a share, a premium of about 4.9 percent on the stock’s last closing price. John Hess, chief executive of Hess Corp, is expected to join Chevron’s board of directors once the deal is closed in the first half of 2024.

Guyana has become a major oil producer in recent years after huge discoveries by Exxon Mobil, its partner Hess and China’s CNOOC, which together produce 400,000 barrels per day (bpd) from two offshore vessels and have said they could develop up to 10 offshore projects. Chevron said that the acquisition of Hess will add a major oilfield in Guyana as well as shale properties in the Bakken Formation in North Dakota.

The Chevron-Hess merger comes at an interesting time for deals in the oil & gas space, just weeks after Exxon Mobil announced it would acquire Pioneer Natural Resources for around $60bn.

“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Mike Wirth, chairman and chief executive of Chevron. “Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”

“Building on our track record of successful transactions, the addition of Hess is expected to extend further Chevron’s free cash flow growth,” said Pierre Breber, chief financial officer of Chevron. “With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases.”

“This strategic combination brings together two strong companies to create a premier integrated energy company,” said Mr Hess. “I am proud of our people and what we have achieved as a company, which has one of the industry’s best growth portfolios including Guyana, the world’s largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer. Chevron has a world-class diversified portfolio of assets and one of the industry’s strongest balance sheets and cash return profiles. I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.”

According to Chevron, the deal will help to increase the amount of cash given back to shareholders. The company anticipates that in January it will be able to recommend boosting its first-quarter dividend by 8 percent to $1.63. The company also expects to increase stock buybacks by $2.5bn to the top end of its guidance range of $20bn per year once the transaction closes.

News: Chevron to buy Hess Corp for $53 bln in all-stock deal

Thermo Fisher announces Olink deal

BY Richard Summerfield

In a deal which will boost its life sciences portfolio, Thermo Fisher Scientific has agreed to acquire Sweden-based proteomics company Olink for approximately $3.1bn.

Under the terms of the deal, Thermo Fisher will acquire Olink for $26 per common share in cash to represent $26 per American depositary share (ADS) in cash. The price represents around a 74 percent premium to Olink’s ADSs on the Nasdaq on 16 October, the trading day before the deal was announced. Thermo Fisher will offer to acquire all outstanding Olink common shares and ADSs. The deal also includes net cash of about $143m.

Thermo Fisher plans to fund the transaction using its cash on hand and debt financing and expects the deal to be closed by mid-2024, subject to customary closing conditions, including regulatory approvals. Both companies’ boards have approved the deal. Additionally, Summa Equity AB, Olink’s largest shareholder, as well as other Olink shareholders and management, who together hold more than 63 percent of the company’s common shares, have also signed agreements supporting the offer.

Upon completion of the deal, Olink will be integrated into Thermo Fisher’s Life Sciences Solutions division. Thermo Fisher has said that Olink’s portfolio is home to 5300 validated protein biomarker targets and has seen its work published in 1400 scientific publications. As part of the deal, Thermo Fisher is also set to acquire the Swedish firm’s facilities in the Americas, Europe and Asia.

“The acquisition of Olink underscores the profound impact that proteomics is having as our customers continue to advance life science research and precision medicine,” said Marc N. Casper, chairman, president and chief executive of Thermo Fisher. “Olink’s proven and transformative innovation is highly complementary to our leading mass spectrometry and life sciences platforms. Our company is uniquely positioned to bring this technology to customers enabling them to meaningfully accelerate discovery and scientific breakthroughs. We look forward to welcoming Olink’s colleagues to Thermo Fisher.”

“Olink is dedicated to improving the understanding of human biology by accelerating the use of next-generation proteomics and providing industry-leading data quality at unprecedented scale,” said Jon Heimer, chief executive of Olink. “Thermo Fisher’s deep life sciences expertise, global reach and proven operational excellence will enable significant opportunities for both customers and colleagues, while also providing immediate value to our shareholders.”

Olink finished the first six months of this year with a net loss that grew 31 percent year over year to $22.23m, up from a net loss of $16.99m in H1 2022. The 2023 loss includes a second quarter net loss of $8.27m, up about 72 percent from a $4.82m net loss in Q2 2022. The company’s total revenue grew 13 percent in the first half of 2023, to $56.89m from $50.19m, with Q2 revenue rising 7 percent year over year, to $29.44m from $27.51m.

News: Thermo Fisher Scientific to buy Olink in $3.1 billion deal

ExxonMobil acquires shale rival Pioneer in $60bn deal

BY Fraser Tennant

In what is the largest acquisition announced in 2023 so far, US multinational oil and gas company Exxon Mobil Corporation is to acquire independent oil and gas exploration and production firm Pioneer Natural Resources in a transaction valued at $59.5bn.

Under the terms of the definitive agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The transaction is expected to close in the first half of 2024.

The merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating the industry’s leading high-quality undeveloped US unconventional inventory position. Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian.

“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge,” said Darren Woods, chairman and chief executive of ExxonMobil. “The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis.”

Additionally, the merger represents the opportunity for even greater US energy security by bringing the best technology, operational excellence, environmental best practices and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.

“The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin,” said Scott Sheffield, chief executive of Pioneer. “As part of a global enterprise, Pioneer, our shareholders and our employees will be better positioned for long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain.”

The transaction has been unanimously approved by the boards of directors of both companies, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Pioneer shareholders.

Mr Sheffield concluded: “The consolidated company will maintain its leadership position, driving further efficiencies through the combination of our adjacent, contiguous acreage in the Midland Basin and our highly talented employee base, with the improved ability to deliver durable returns, creating tangible value for shareholders for decades to come.”

News: Exxon secures lead in top US oilfield with $60 billion buy of shale rival Pioneer

Bristol Myers Squibb agrees $4.8bn Mirati deal

BY Richard Summerfield

Bristol Myers Squibb has agreed to acquire cancer drug manufacturer Mirati Therapeutics in a deal worth $4.8bn. The acquisition will see Bristol Myers Squibb diversify its oncology business with lung cancer drug Krazati, which was approved by the US Food and Drug Administration (FDA) in December. A second compound – MRTX1719 – which could be used in some types of lung cancer was also attractive to the company.

Under the terms of the deal, Bristol Myers Squibb will pay $58 per share in cash, for a total equity value of $4.8bn. Mirati stockholders will also receive one non-tradeable contingent value right (CVR) for each Mirati share held, potentially worth $12 per share in cash, representing an additional $1bn of value opportunity. The transaction was unanimously approved by both the Bristol Myers Squibb and the Mirati boards of directors.

According to a statement announcing the deal, Bristol Myers Squibb expects to finance the acquisition with a combination of cash and debt. The deal is expected to be dilutive to the company’s non-generally accepted accounting principles (GAAP) earnings per share by approximately 35 cents per share in the first 12 months after the transaction closes, the statement added.

“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” said Giovanni Caforio, chief executive and board chair of Bristol Myers Squibb. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.”

“Since our founding 10 years ago, Mirati has made significant strides in transforming the lives of patients living with cancer through the development of innovative therapies,” said Charles Baum, founder, president and chief executive of Mirati Therapeutics, Inc. “Through our discovery and development of next-generation targeted cancer therapeutics, we have built a robust pipeline of potentially best-in-class treatments that offer renewed hope for patients. This transaction is a testament to the potential of our platform and to our team’s hard work and dedication to changing lives.

“Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster, and deliver on our vision of unlocking the science behind the promise of a life beyond cancer. We believe that this transaction is the best way to benefit patients and maximize value for shareholders,” he added.

“Mirati strengthens and complements our current portfolio by adding assets focused on intrinsic tumor targets in the MTAP and MAPK pathways,” said Samit Hirawat, chief medical officer and head of global drug development at Bristol Myers Squibb. “We believe Mirati’s assets have the potential to change the standard of care in multiple cancers, both as standalone therapies and in combination with Bristol Myers Squibb’s existing pipeline. We are excited about the significant potential that this transaction creates to transform patients’ lives through science around the world.”

News: Bristol-Myers Squibb to acquire Mirati in up to $5.8 billion deal

Eli Lilly agrees $1.4bn Point Biopharma Global deal

BY Richard Summerfield

In a deal which will strengthen the company’s oncology pipeline, Eli Lilly has announced it is acquiring Point Biopharma for $1.4bn.

Under the terms of the deal, Eli Lilly will pay $12.50 per outstanding share of Point, representing a 67 percent premium to the company’s 30-day volume-weighted average price and a premium of approximately 87 percent to Point’s closing stock price on 2 October 2023, the last trading day before the announcement of the transaction. The board of directors of both companies have approved the transaction, and Lilly and Point expect to close the deal toward the end of 2023, subject to customary closing conditions.

“Over the past few years, we have seen how well-designed radiopharmaceuticals can demonstrate meaningful results for patients with cancer and rapidly integrate into standards of care, yet the field remains in the early days of the impact it may ultimately deliver,” said Jacob Van Naarden, president of Loxo@Lilly, the oncology unit of Eli Lilly and Company. “We are excited by the potential of this emerging modality and see the acquisition of POINT as the beginning of our investment in developing multiple meaningful radioligand medicines for hard-to-treat cancers, as we have done in small molecule and biologic oncology drug discovery and development. We look forward to welcoming POINT colleagues to Lilly and working together to build upon their achievements as we develop a pipeline of meaningful new radioligand treatments for patients.”

“The combination of POINT’s team, infrastructure and capabilities with Lilly’s global resources and experience could significantly accelerate the discovery, development and global access to radiopharmaceuticals,” said Joe McCann, chief executive of Point. “I look forward to a future where patients all over the world can benefit from the new cancer treatment options made possible by the joining of our two companies today.”

Eli Lilly has agreed to a string of deals this year, including the $2.4bn buyout of Dice Therapeutics, the $1.93bn purchase of privately held Versanis, and Siglon for around $310m. These deals have been oncology focused, and the deal for Point will grant Eli Lilly access to experimental therapies that enable precise targeting of cancer. Point Biopharma is currently testing radioligand therapy candidates, PNT2002 and PNT2003, in late-stage studies. Topline data from these studies are expected in the fourth quarter of 2023.

News: Lilly eyes targeted cancer therapies with $1.4 billion Point Biopharma deal