Hess approves $53B merger with Chevron

Hess Corporation shareholders voted in favor of Chevron buying the company in a $53 billion deal—a vote announced on Tuesday. Chevron had proposed the buyout last October.

The deal, however, faces legal challenges from rival Exxon Mobil and China National Offshore Oil Corporation (CNOOC), who are Hess’s partners in a profitable Guyana oil project. They claim the right to veto any sale of assets in the South American nation.

The merger holds strategic importance. Acquiring Hess’s Guyana assets would help mitigate risks associated with Chevron’s TengizChevroil project in Kazakhstan and offset cost overruns from its Australian LNG projects, according to Reuters.

Hess shareholders stand to benefit from Chevron’s larger dividends, as they would own nearly 15% of the combined entity.

Conversely, if Hess backs out, they might owe Chevron $1.7 billion.