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Kerr-McGee, Oryx in deal
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October 15, 1998: 6:17 a.m. ET
$1.86B deal to create one of largest oil-gas exploration and production firm
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NEW YORK (CNNfn) - Kerr-McGee Corp. agreed to acquire Oryx Energy Co. for $1.86 billion, plus $1.3 billion of debt, to create one of the nation's largest independent energy exploration and production companies.
Based on the definitive agreement, Oryx shareholders will get 0.369 shares of Kerr-McGee for each share held.
The agreement, which has been approved by both boards, values Oryx stock (ORX) at about $17.32 a share, representing a 50-percent premium over Wednesday's closing price of 11-1/2. Kerr-McGee shares (KMG) closed at 45-15/16.
Both companies have a significant presence in the lucrative North Sea and Gulf of Mexico regions. But while Kerr-McGee is strong in development, it lacks in exploration, which is Oryx's specialty.
The combined company will have 14 directors consisting of nine Kerr-McGee seats and five appointments from Oryx. Kerr-McGee, which is based in Oklahoma City, will own roughly 55 percent of the combined company with the remaining 45 percent held by Dallas-based Oryx.
Kerr-McGee's chairman, Luke Corbett, will be chief executive of the combined company. Oryx's chairman, Robert Keiser, is expected to be chairman.
The deal is expected to be accretive to earnings per share in 1999, the first full year after closing. Kerr-McGee is projecting cost savings of at least $100 million through job cuts and expense reduction.
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Kerr-McGee
Oryx Energy
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