With Anadarko Petroleum Corp. embracing a rival takeover offer, Chevron Corp. now has until May 10 to mull its next step. If it decides to walk away, the oil major will have the consolation of a $1 billion breakup fee.
The payout, agreed to as part of an April 12 merger accord with Anadarko, represents about 3 percent of the proposed deal’s equity value, in line with most other such fees. Here are some other examples of multi-billion dollar termination payments.
Oil-services giant Halliburton Co. abandoned its plan to take over major rival Baker Hughes Inc. in 2016, more than a year after the transaction was announced, amid resistance from regulators in the U.S. and Europe. Baker Hughes was paid a termination fee of about $3.5 billion, almost 10 percent of the equity value of the abortive deal. Baker Hughes subsequently went on to merge with the competing petroleum business owned by General Electric Co.
U.S. pharmaceutical developer AbbVie Inc. scrapped a 2014 deal to buy Dublin-based Shire Plc for about $55 billion amid government opposition. AbbVie, which wanted to use the takeover to move its legal address abroad and lower its taxes, paid a breakup fee of more than $1.6 billion.
In 2011, AT&T ended its attempt to buy T-Mobile USA from Deutsche Telekom AG for $39 billion to become the largest U.S. wireless carrier after opposition from the Justice Department. The termination of the deal triggered a record reverse breakup fee of about $4 billion in cash and assets to Deutsche Telekom.
American Home Products Corp. walked away with a termination fee of $1.8 billion in 2000, the largest ever paid in a broken merger agreement at the time, after it decided not to compete with Pfizer Inc.’s offer to acquire Warner-Lambert Co. The final value of Pfizer’s takeover was $116 billion.
Comcast Corp.-MediaOne Group Inc.
In 1999, Comcast Corp. pocketed a $1.5 billion breakup fee, 2 million extra customers and a telephone pact with AT&T Corp. when it abandoned its bid to acquire MediaOne Group Inc. AT&T presented a rival bid of $62.5 billion, toppling Comcast’s $52.5 billion offer.