INFORMATION ABOUT OCCIDENTAL
Occidental is an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America. Headquartered in Houston, Occidental is one of the largest U.S. oil and gas companies, based on equity market capitalization. Occidentals principal businesses consist of three segments as follows:
Oil and Gas
—This segment explores for, develops and produces oil and condensate, natural gas liquids (
NGLs
) and natural gas. Occidentals oil and gas assets are located in some of the worlds highest-margin basins and are characterized by an advantaged mix of short- and long-cycle, high-return development opportunities. In the United States, Occidental holds a leading position in the Permian Basin. Other core operations are in the Middle East (Oman, United Arab Emirates and Qatar) and Latin America (Colombia).
Chemical (OxyChem)
—This segment primarily manufactures and markets basic chemicals and vinyls. OxyChem is a leading North American manufacturer of PVC resins, chlorine and caustic soda – key building blocks of products such as pharmaceuticals, water treatment chemicals and durable, long-life plastics. OxyChem has manufacturing facilities in the United States, Canada and Latin America.
Midstream and Marketing
—This segment purchases, markets, gathers, processes, transports and stores oil, condensate, NGLs, natural gas, carbon dioxide and power. It also trades around its assets, including transportation and storage capacity, and invests in entities that conduct similar activities. The midstream and marketing operations primarily support and enhance Occidentals oil and gas and chemical businesses and also provide similar services for third parties. Also within the midstream and marketing segment is Oxy Low Carbon Ventures (
OLCV
). OLCV seeks to capitalize on Occidentals enhanced oil recovery leadership by developing carbon capture, utilization and storage projects that source anthropogenic carbon dioxide and promote innovative technologies that drive cost efficiencies and grow Occidentals business while reducing emissions.
BACKGROUND OF THE ICAHN
GROUP
SOLICITATION
The Board and Occidental management regularly review and discuss Occidentals performance, business strategy and competitive position in the industries in which it operates. In connection with these reviews and discussions, the Board and management regularly consider and evaluate strategic options for Occidental, including acquisitions, dispositions and other strategic transactions, as part of ongoing efforts to strengthen Occidentals performance and enhance stockholder value. As part of these reviews and discussions, from 2017 until April 2019, the Board and management periodically considered and evaluated, and Occidental made certain proposals in respect of, a potential acquisition of Anadarko.
On April 24, 2019, Occidental announced that it had delivered a letter to the Board of Directors of Anadarko setting forth the terms of a proposal to acquire Anadarko for $76.00 per share (based on Occidentals last closing price of $62.36 per share), consisting of $38 in cash and 0.6094 of a share of Occidental Common Stock per share of Anadarko common stock.
On April 30, 2019, Occidental announced that Berkshire Hathaway, Inc. had committed to invest $10 billion in Occidental, in exchange for 100,000 shares of series A preferred stock and a warrant to purchase 80 million shares of Occidental Common Stock, contingent upon Occidental entering into an agreement for and completing an acquisition of Anadarko (the
Berkshire Hathaway Investment
).
On May 2, 2019, certain members of the Icahn Group made an initial investment in Occidental.
On May 5, 2019, Occidental announced that it had entered into a binding agreement to sell Anadarkos assets in Algeria, Ghana, Mozambique and South Africa to TOTAL S.A. (
Total
) for $8.8 billion in cash, on a cash-free, debt-free basis (the
Total Transaction
), contingent upon Occidental completing an acquisition of Anadarko. Later on May 5, Occidental announced that it had sent Anadarko a letter setting forth a revised proposal to acquire Anadarko for $76.00 per share (based on Occidentals last closing price of $57.95 per share), consisting of $59.00 in cash and 0.2934 of a share of Occidental Common Stock per share of Anadarko common stock.
On May 9, 2019, Occidental, Baseball Merger Sub 1, Inc., a Delaware corporation and wholly owned indirect subsidiary of Occidental, and Anadarko entered into the Merger Agreement, pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Subsidiary will merge with and into Anadarko, with Anadarko surviving the merger as a wholly owned indirect subsidiary of Occidental. At the effective time of the