The cash and stock deal announced Friday values Anadarko () at $65 per share, 39% higher than the oil company’s closing stock price on Thursday.
He said it would also enhance Chevron’s drilling operations in the Gulf of Mexico, and give the company access to a promising natural gas field in Mozambique.
Chevron said it would issue 200 million new shares and use $8 billion in cash to fund the purchase. It will also assume $15 billion in debt.
Annual cost savings of $2 billion will be achieved within a year of the deal closing, according to Chevron, which also plans to sell assets worth up to $20 billion between 2020 and 2022.
Chevron said it expects the deal to close in the second half of the year, subject to the approval of Anadarko shareholders and regulators. Wirth will continue as CEO.