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Unocal Corporation: China's Unwelcome Bid                                                                                                                                                                                                                
Product Ref: 06/296C Company: Chevron

Product Type: Case Industry: Energy

Related Product(s): Teaching Note
Authors: Ka-Fu Wong   Mark Stimson
Shareholders of Unocal, a mid-sized American oil and gas firm, watched the value of their stock rise ever since rumours of a takeover surfaced early in 2005. Trading in the low US$40s at the beginning of the year, competing firms outbid each other, taking Unocal's per share price above US$60 by mid-summer. International oil companies, flush with cash thanks to high oil prices and facing low reserve replacement rates, increasingly sought to acquire strategic assets. Unocal's significant natural gas reserves in Asia combined with its expertise in deep water drilling made it a particularly attractive target for CNOOC, China's state-controlled offshore oil company. Though CNOOC trumped earlier offers with a US$67 per share all-cash deal valued at US$18.5 billion, the firm encountered stiff opposition from Washington and Wall Street.
Functional Area : Economics & Business Policy
Finance & Investments

Issues: China, Oil and Gas Industry, International Investment, Energy Security
Length: Text: 12 pages
Exhibits: 16 pages
Country: China (People's Rep. of)
United States of America

Pub. Year: 2006 Level of Difficulty: 2
This product type is available in the following language(s):      English   Simplified Chinese
Related Information: Mergers and Acquisitions, M&A, Consolidation, Oil and Gas, Petroleum, Energy, Resources, Cross-border, Foreign Investment, CFIUS, Exon-Florio, Congress, China
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