FTC Clears Chevron-Hess Merger, But Bans Hess CEO From Joining Board

Key Takeaways

• Chevron’s $53 billion acquisition of Hess cleared a regulatory hurdle Monday as the Federal Trade Commission (FTC) completed its review of the deal.
• However, the FTC barred Hess CEO John Hess from joining Chevron’s board.
• The regulatory agency said it had concerns Hess’ history of communications with OPEC officials about oil supply.

The Federal Trade Commission (FTC) on Monday cleared Chevron’s (CVX) $53 billion acquisition of Hess (HES), but barred Hess CEO John Hess from joining Chevron’s board, citing concerns about his previous communications with Organization of Petroleum Exporting Countries (OPEC) officials.

The FTC said Hess previously supported OPEC countries’ “stabilizing” supply and effectively raising prices, and that a spot on Chevron’s board could give Hess has more influence to cause Chevron to lower production and raise prices for oil and its downstream products like gas for U.S. consumers.

Chevron, Hess Agree To Keep John Hess Off Board

The companies said they disagreed with the FTC’s reasoning, but agreed not to put Hess on Chevron’s board. Two members of the five-person commission voted against the order, as Commissioner Andrew Ferguson said the idea comments from Hess “could move global oil markets is laughable.”

Monday’s judgment mirrors a similar FTC ruling approving the nearly $60 billion acquisition of Pioneer Natural Resources by ExxonMobil (XOM) and barring Pioneer CEO Scott Sheffield from joining the new company’s board.

After clearing the FTC hurdle, the Chevron and Hess merger still faces a legal challenge from ExxonMobil and China National Offshore Oil Corp. (CNOOC) over whether Hess can sell its assets in Guyana that the other companies have a stake in. The companies said they expect a decision in that case sometime in 2025.

Hess shares finished 1.6% higher Monday at $135.80, while Chevron shares ticked up 1.2% to $147.27.

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