Hess unloads family business to Chevron for $53B — but will keep selling famed toy truck
The Hess family will walk away with a $5 billion haul after selling its century-old gas and oil company to energy conglomerate Chevron in a deal valued at $53 billion — but their beloved toy truck will remain a holiday staple.
John Hess, CEO of Hess Corp and the son of coജmpany founder and late New York Jets owner Leon Hess, reached an agreement with Ch♛evron on Monday to sell more than 29 million shares of stock owned by the family and trusts, according to SEC filings.
Most of the sha💃res – more than 25 million – are tied to trusts, the Hess Foundation, 𝄹limited liability companies, and limited partnerships, so they may not be under the family’s control, Bloomberg News reported.
The all-stock dealꦫ with Chevron valued Hess Corp𓆏 at $171 per share.
As part of the deal, John Hess will join Ch🉐evron’s board of dir♉ectors.
The Chevron-Hess deal comes less than two weeks after Exxon Mob🀅il said that it would acquire Pioneer Natural Resources for about $60 billion༒.
Shares of Hess Corp closed down 1.1% at $161.28 per share🌳.
While the Manhattan-based company will be changing hands, the Hess Tr♏uck isn’t ๊going anywhere.
“We want to reassure all of you, our loyal fans, that the Hess Toy Truck, a long-standing and cherished tradition, will continue for future years!” the company said on its X social media account.
The $53 billion deal💫 ends the fam💟ily’s 90-year run at the helm of Hess Corp, which was started by Leon Hess during the Great Depression.
Leon Hess was 19 when he used a second-han𓄧d 615-gallon oil truck to make residential deliveries near his home in Asbury Park, NJ.
In 1937, Hess bought five more trucks and expanded his business, whicღh had been growing thanks to companies’ 🧜increasing reliance on oil at the expense of coal.
After his enlistment in the military as a petroleum supply officer, Hess used the knowledge he gained about the energy industry to expand his business even further – buying distribution and storage facilities in Perth Amboy and Por🐎t Reading.
I꧑n the ensuing decades, Hess built refineries in the US Virgin Islands, St. Croix, the Gulf of Mexico, the North Sea, and the Arcti𝔉c.
In 1963, Hess headed a group ไof investors who bought the New York Jets. The oil magnate’s i𓃲nitial investment was $250,000.
Under Hess’ watch, the team won its onl☂y Super Bowl in 1969, when star quarterback 🐬Joe Namath followed through on his famous guarantee and led the club to victory over the heavily favored Baltimore Colts.
Most of Hess’ tenure as Jets owner, however, was marked by failure on the football field, as the team frustrated its loyal fans with de🔴cades of ineptitude and bad luck.
In May 1999, Hess die🍃d at the aܫge of 85. His will ordered that the team be sold.
In Jan. 2000, Robert Wood Johnson IV, the great-grandson of the founder of pharmaceutical giant Johnson & Johnson, submit🥃ted the winning $635 million bid for the rights to buy the team.
Chevron said Monday that the acquisition of Hess adds a major oil field in Guyana as well as shℱale properties in the Bakken Formation in North Dakota.
Guyana is a South American country of 791,000 people that is poised to become the world’s fourth-largest꧑ offshore oil producer, placing it ahead of Qatar, the United States, Mexico and Norway.
It has become a major producer in recent years with oil giants, including Exxon Mob🐓il, China’s CNOOC, and also Hess, squared off in a heated competition for highly lucrative oil fields in northern South America.
Chevron agreed to buy US rival Hess for $53 billion in stock in a deal that re🍌flects top US energy companies drive for oil and gas assets in a world seeking lower-risk future fossil supplies and higher shareholder returns.
The proposed deal amps up competition between Chevron, the No. 2 US oil and gas producer, and Exxon, its larger rival. It also makes Chevron a partner with Exxon in Guyana’s booming oilfields expected to generate 1.2 million barrels of oil per day by 2027.
It follows Exxon’s rapid-fire deals since July for top US shale producer Pioneer Natural Resources and Denbury. Those two, nearly $64-billion combined transactions put Exxon atop US shale and cemented the firm’s nascent carbon storage business.
The recent deals are a financial flex by US oil and gas companies that kept investing in fossil fuels as European rivals turned their attention to renewable fuels. Chevron and Exxon used soaring profits from strong energy prices and demand since Russia’s invasion of Ukraine.
“We’ve got too many CEOs per BOE (barrels of oil equivalent), so consolidation is natural,” said Chevron Chief Executive Michael Wirth, adding the world could expect to see other deals.
Chevron has offered 1.025 of its shares for each Hess share held, or $171 per share, implying a premium of about 4.9% to the stock’s last close. The total deal value is $60 billion, including debt.
Chevron’s shares slid 3.7% to $160.65. RBC analysts said they were surprised by the deal timing, and had expected Chevron to bide its time after Exxon’s mega deal for Pioneer.
Guyana has emerged as the world’s fastest growing oil province following more than 11 billion barrels of oil and gas discoveries since 2015. Hess holds a 30% stake in an Exxon-led consortium now pumping 380,000 barrels per day.
The deal faces regulatory reviews, but “We don’t see anti-trust concerns here,” said Wirth. “This is great for energy security. It brings together two great American companies.”
Hess Corp CEO John Hess will join Chevron’s board of directors once the deal closes around the first half of 2024. He said the government of Guyana and Exxon would welcome Chevron’s entry into the country’s oil fields.
The deal reflects about a 5% premium to Hess’s trading price. The combined companies expect to generate about $1 billion in cost synergies within a year of its closing, said Wirth.
The combined company will expand Chevron’s oil production in less risky regions by adding to its output in the U.S. Gulf of Mexico, bringing it into the Bakken shale in North Dakota, and make it a partner in the rapidly-expanding Exxon and CNOOC Stabroek oil block in Guyana.
Chevron said that following completion of the deal it intends to increase its share repurchases program by $2.5 billion to the top of its $20 billion annual 🐈range, in a sign of confidence in future energy prices and its cash generation.
Goldman Sachs was the lead෴ adviser to Hess while Morgan Stanley was🍨 the lead adviser to Chevron.
The deal comes weeks after rival Exxon made 🔯a⛄ $60 billion offer for Pioneer Natural Resources that would make it the biggest producer in the largest US oilfield.
