Chevron Agrees Hess CEO Won’t Join Board in Deal With FTC

(Bloomberg) -- Chevron Corp. agreed that Hess Corp. Chief Executive Officer John Hess won’t join the company’s board as part of an agreement with the US Federal Trade Commission allowing the companies’ merger to proceed, people familiar with the matter said.

Most Read from Bloomberg

• Vanderbilt Leases Struggling NYC Seminary for Campus Expansion

• NJ Transit, Amtrak Trains Delayed After Derailment Near NYC

• Where Cargo Bikes Are Freeing Cities From Polluting Vans

• Exclusive Palo Alto Girls School Borrows $106 Million

• Waiting for the Miracle of Church-to-Housing Development

The condition allows Chevron to move forward with its $53 billion acquisition of Hess, said the people who asked not to named discussing non-public information. Chevron had previously said Hess would join its board once the deal was complete and become one of the company’s biggest shareholders.

To finalize the deal, however, Chevron and Hess still need to prevail in arbitration against Exxon Mobil Corp. and Cnooc Ltd., who claim a right-of-first-refusal on Hess’ biggest asset — a 30% stake in a massive oil field off the coast in Guyana. The case, currently being administered by the International Chamber of Commerce, is likely to be settled in the third quarter of 2025.

The FTC and Chevron declined to comment. Hess didn’t respond to requests for comment.

Completing the FTC process would remove a major hurdle to Chevron’s biggest transaction in more than a decade, and provide a lift for both CEOs who agreed to the deal almost a year ago. Guyana’s Stabroek block is one of the largest and most profitable new discoveries outside of OPEC and would provide Chevron with strong cash-flow growth through the rest of the decade and beyond.

More than 50 lawmakers earlier this year urged the FTC to increase scrutiny of deals on concerns a $200 billion consolidation wave would increase energy prices for consumers, squeeze suppliers and suppress wages. The agency has since made second requests for information for several major deals, delaying transactions beyond usual time frames. Still, no transactions have fallen apart due to competition concerns.

--With assistance from Mitchell Ferman.

(Updates with context starting in fifth paragraph.)

Most Read from Bloomberg Businessweek

• Inside Activision and Blizzard’s Corporate Warcraft

• The End of the Cheap Burger

• This Camera Went Viral Two Years Ago. You Still Can’t Buy One

• How Harris’ Campaign Finally Made Biden’s Meme Strategy Work

• Palantir’s CEO and Wall Street Annoy Each Other Straight to the Bank

©2024 Bloomberg L.P.