Occidental Petroleum (NYSE:OXY) stock is a hot topic on Monday as investors react to a $12 billion acquisition deal with CrownRock.
Occidental Petroleum will use a mix of cash and stock to acquire CrownRock. The company will use $9.1 billion of new debt and $1.7 billion in common equity to acquire the oil drilling company. It will also assume the company’s $1.2 billion of existing debt.
Occidental Petroleum also points out that this acquisition will immediately improve its free cash flow. To go along with that, the company is increasing its quarterly dividend by 22% to 22 cents per share. That will go into effect with its February 2024 declaration. The deal is set to close in Q1 2024.
Vicki Hollub, CEO of Occidental Petroleum, said the following about the deal:
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion.”
OXY Stock Movement on Monday
Following this news, shares of OXY stock are seeing strong trading on Monday. That has more than 3 million shares of the stock changing hands as of the time of writing. For comparison, the stock’s daily average trading volume is about 9.4 million shares.
OXY stock is up almost 1% on Monday morning after announcing its acquisition plans. The stock is still down 6.8% year-to-date.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
