Another major deal in the US oil industry! Chevron has agreed to acquire Hess for $53 billion.

According to the latest news from the Zhitong Finance APP, Chevron (CVX.US) has agreed to acquire Hess (HES.US) for $53 billion. According to a statement released by both companies on Monday, Chevron will acquire Hess at a price of $171 per share in this all-stock transaction. As a result of this news, as of the time of writing, Chevron's stock fell nearly 3% in pre-market trading on Monday, while Hess's stock rose more than 2%.

According to the statement, this transaction has received unanimous approval from the boards of directors of both companies and is expected to be completed in the first half of 2024. The transaction is also subject to approval from Hess shareholders, regulatory authorities, and other customary closing conditions.

It is worth mentioning that this is the second major transaction in the U.S. oil industry in just a few weeks. Previously, ExxonMobil (XOM.US) agreed to acquire Pioneer Natural Resources Company (PXD.US) for $58 billion. These two major transactions indicate that U.S. oil giants are betting that oil and natural gas will remain at the core of the global energy structure for the next few decades.

Chevron Chairman and CEO Mike Wirth stated in the statement, "This merger allows Chevron to strengthen its long-term performance and enhance our advantaged portfolio by adding world-class assets."

It is reported that this acquisition will give Chevron a 30% ownership of over 11 billion barrels of oil equivalent resources in Guyana and expand its portfolio in the Bakken shale formation and the Gulf of Mexico.

Chevron stated that this acquisition will bring faster growth and greater returns for investors. According to the statement, this acquisition will increase Chevron's projected five-year production and free cash flow growth rates and extend them into the next decade. Investor returns will also be boosted. The company plans to propose an 8% increase in the first-quarter dividend in January next year and a $2.5 billion stock buyback after the transaction is completed.