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Devon to buy Anderson
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September 4, 2001: 7:33 a.m. ET
$4.6B deal to form largest independent gas, oil producer in North America
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NEW YORK (CNNfn) - Devon Energy Corp. entered an agreement Tuesday to purchase Anderson Exploration Ltd. for $4.6 billion -- a deal that would make Devon the largest independent producer of oil and natural gas in North America.
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VIDEO
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 Devon CEO Larry Nichols discusses the company's bid for Anderson Energy |
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Devon will pay $25.80 per share and assume $1.2 billion in debt. The purchase price represents an $8.73 per share premium over Anderson's (AXN: up $8.53 to $25.60, Research, Estimates) closing price Friday.
Devon (DVN: down $1.88 to $44.39, Research, Estimates) said it expects the purchase to add to its cash margins per share, but dilute its earnings per share in the near term. Analysts expect the company to earn 80 cents per share in its quarter ending in September, according to First Call.
In its second acquisition within a month, Oklahoma City-based Devon will acquire estimated reserves of 532 million barrels of oil and 8 million acres of undeveloped territory. The company said it will allocate $680 million of the purchase price to the undeveloped territory.
Devon agreed to buy Mitchell Energy & Development Corp. in mid-August. The company expects to close both transactions in the fourth quarter of 2001.
"Anderson was a the top of our list of acquisition opportunities," said J. Larry Nichols, Devon's president, chairman, and chief executive. "Expanding our presence in Canada has been an important objective for Devon."
In addition, Calgary, Alberta-based Anderson Energy agreed to a pay Devon $135 million if the deal is not completed. Anderson also said it will not solicit further acquisition offers, but retains the right to respond to a superior offer if one is made. 
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