CNOOC Limited to Withdraw Unocal Bid
CNOOC Limited has withdrawn its offer for Unocal.
We believe that the combination of CNOOC and Unocal would have created a strong and successful oil and gas company, focused on the fast growing Asian economy, to the benefit of our shareholders and the employees of both companies. We entered into the bidding process for Unocal in good faith, following procedures set out by Unocal.
CNOOC's fully financed offer to acquire all of Unocal's outstanding shares for cash at a price of $18.5 billion represents a premium of approximately $1 billion above Chevron's current competing bid and clearly superior value for Unocal shareholders. We proposed and agreed to a variety of measures to provide further comfort to Unocal's shareholders. In addition, recognizing that the transaction would be reviewed by CFIUS, pursuant to the United States Exon-Florio Act, CNOOC initiated a voluntary filing with CFIUS, and proactively committed to take actions with respect to Unocal's U.S. assets as necessary to satisfy CFIUS findings.
CNOOC has given active consideration to further improving the terms of its offer, and would have done so but for the political environment in the U.S. The unprecedented political opposition that followed the announcement of our proposed transaction, attempting to replace or amend the CFIUS process that has been successfully in operation for almost two decades, was regrettable and unjustified. This is especially the case in light of CNOOC's purely commercial objectives and the extensive commitments that CNOOC was prepared to make to address any legitimate concerns U.S. officials may have had regarding our acquisition. This political environment has made it very difficult for us to accurately assess our chance of success, creating a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction. Accordingly we are reluctantly abandoning our higher offer to the clear disadvantage of Unocal shareholders and employees.
We deeply appreciate the support we have had from shareholders in recent
weeks, but feel it is no longer in their fundamental best interests that we
pursue our bid in these circumstances. We maintain a disciplined and focused
approach to our evaluation of opportunities to grow shareholder value and will
continue to work closely with companies and countries around the world. To
this end, we look forward to continuing our strategy and business plan and to
growing our business for our shareholders.
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