Anadarko Buying Oil Exploration Co.
.c The Associated Press
DALLAS (AP) - Anadarko Petroleum Corp. is buying Union Pacific Resources Group Inc. in a $4.4 billion stock swap that will create one of the largest independent oil and gas exploration and production companies.
Houston-based Anadarko said Monday it will pay about a 21 percent premium over Friday's closing price for Union Pacific, based in Fort Worth.
In morning trading on the New York Stock Exchange, shares of Anadarko fell $3.25 to $35.43 3/4, and shares of Union Pacific Resources rose $1 to $15.50.
Anadarko chairman and chief executive Robert J. Allison Jr. said the purchase will give Anadarko the financial strength to aggressively step up its exploration activities.
``Given the current outlook for energy markets, now is the time to step up the pace of drilling for new energy reserves, particularly North American natural gas,' Allison said in a statement.
The companies said Union Pacific shareholders will receive 0.4550 Anadarko common shares for each UPR common share they own. They said based on Friday's closing price, the transaction has an implied value to Union Pacific shareholders of $17.60 per share. Each company said it granted the other the right to purchase 19.9 percent of each other's outstanding shares.
Anadarko shareholders will own about 53 percent of the combined company and Union Pacific shareholders will hold about 47 percent, the companies said.
The deal was unanimously approved by each company's board of directors but is subject to approval by regulators and the shareholders of both companies.
Anadarko said it expects the deal will immediately increase its cash flow and earnings. Union Pacific will operate as a wholly owned subsidiary of Anadarko. Last year, Union Pacific had sales of $1.73 billion, while Anadarko had sales of $701 million.
Allison said the company expects ``some modest cost reductions' with the acquisition, but he did not offer specifics.
Allison will remain chairman and chief executive. George Lindahl III, the chairman, president and chief executive of Union Pacific, will become vice chairman of Anadarko.
The companies said they hope to complete the deal in July.
On the Net: Anadarko site: anadarko.com
AP-NY-04-03-00 1212EDT |
