Chevron to Acquire PDC Strength for $6.3 Billion

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Chevron

stated Monday it will receive

PDC Electricity

in an all-inventory transaction valued at $6.3 billion, or $72 a share.

“PDC’s attractive and complementary property fortify

Chevron
’s
situation in key U.S. production basins,” said Chevron Chairman and CEO Mike Wirth in a assertion. “This transaction is accretive to all significant money measures and boosts Chevron’s goal to properly provide higher returns and decrease carbon.”

The offer obtained unanimous acceptance from the boards of equally corporations. It remains issue to PDC shareholder approval. The acquisition is expected to shut by the end of 2023.

Chevron expects the transaction to incorporate about $1 billion in annual no cost money move with Brent crude at $70 a barrel.

“We think the acquisition is really favorable to CVX, as the offer delivers a core situation in the DJ Basin at a remarkably eye-catching valuation,” wrote Gabriele Sorbara, managing director of fairness investigate at Siebert Williams Shank in a report Monday. “Accordingly, there ought to be additional upside to PDCE’s stock price tag.”

Sorbara has a Buy rating on

PDC Electricity

shares and a target price of $100.

Chevron (ticker: CVX) stock was down 1.3% on Monday, when PDC (PDCE) shares climbed 8.1% to $70.37.

Produce to Emily Dattilo at emily.dattilo@dowjones.com