ChevronTexaco Corp., the nation's second biggest oil concern, is buying rival Unocal Corp., the ninth biggest U.S. oil and gas exploration and production company, for about $16.4 billion
in cash and stock. Under the deal announced Monday, ChevronTexaco would also assume $1.6 billion of debt. The acquisition, which is subject to approval by Unocal shareholders and certain regulatory agencies, is expected to be completed in six months.
This would be the largest takeover in the oil sector in years. It comes as crude oil futures hit record levels; these levels, when adjusted for inflation, are lower than peaks reached in the 1980s.
Unocal, based in El Segundo, Calif., has many assets in Southeast Asia. ChevronTexaco, based in San Ramon, Calif., expects disposition of assets following the close of the transaction to result in proceeds of more than $2 billion. Annual savings are anticipated to be more than $325 million before taxes.