Finance News

Generational Wealth: Hess Family’s $5 Billion Deal with Chevron

The Hess Legacy: From a Secondhand Truck to a $5 Billion Deal

Leon Hess, the founder of Hess Corp., embarked on his journey in the midst of the Depression, delivering fuel oil with a secondhand truck. Nearly a century later, his son, John Hess, has made the momentous decision to sell the US oil producer to Chevron Corp., a deal that unveils the family’s stake, estimated at approximately $5 billion.

Family Control: 90 Years of Stewardship

The stake held by the Hess family encompasses the holdings of the Hess chief executive officer, in conjunction with shares owned by family members and various trusts. The most recent proxy filing reveals a total of 29.2 million shares within this collective ownership. A significant portion, more than 25 million shares, is affiliated with trusts, the Hess Foundation, limited partnerships, and limited liability companies, possibly implying that many of these shares are not directly beneficial to the family.

Chevron’s Strategic Acquisition

In a landmark development, Chevron announced its agreement to acquire Hess in an all-stock transaction, valuing the independent oil company at $171 per share.

The Role of John Hess

John Hess, aged 69, who has held the position of chief executive officer at Hess since 1995, is expected to assume a seat on Chevron’s board upon the deal’s conclusion. During a conference call following the takeover announcement, he affirmed his commitment to retaining the family’s stake, which will position them among the largest shareholders of Chevron.

“We still get to participate in the upside,” remarked Hess during a call with analysts on Monday. “This value accretion will go to Chevron shareholders, of which my family and I are a part. We intend to hold the stock for an extended period.”

Shareholder Benefits

Once the deal is finalized, Hess shareholders can anticipate receiving $6.50 per share in dividends in the following year, a substantial increase from the current $1.75 dividend.

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