Business Corpus: Chevron Won't Raise Anadarko Bid To Trump Occidental OfferChevron won't raise its bid for Permian shale independent Anadarko Petroleum to trump Occidental Petroleum's raised offer. Chevron will walk with a $1 billion breakup fee. The post Chevron Won't Raise Anadarko Bid To Trump Occidental Offer appeared first on Investor's Business Daily.

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Chevron (CVX) is walking away from its bid to take over Permian shale independent Anadarko Petroleum (APC). But it's walking away with a fatter wallet.

The oil major announced Thursday that it would not increase its $33 billion offer for Anadarko and expects Anadarko to choose the higher Occidental Petroleum (OXY) $38 billion bid. Anadarko will pay Chevron a termination fee of $1 billion, which Occidental said it would cover.

"Winning in any environment doesn't mean winning at any cost," Chevron CEO Michael Wirth said in the release. "Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal."

During Chevron's earnings call last month, Wirth hinted that the Dow Jones energy giant could walk away from the bidding war.

"We have a very strong story without doing a transaction," he said.

The deal would have given Chevron a "75-mile-wide corridor across the most attractive acreage in the Delaware basin," officials said earlier.

"I am a bit surprised that they walked, but am pleased that they didn't get caught up in a bidding war with OXY, who comes across as willing to fight to win at all costs," Edwards Jones analyst Jennifer Rowland said in a statement. "Chevron demonstrates strong capital discipline and focus on shareholder returns, which is what investors should want to see, especially from a Major. APC was a unique fit for Chevron, so I don't expect them to go on a shopping spree in the Permian."

Investors also seemed pleased that Chevron wouldn't get into an expensive bidding war. Chevron shares rose 2.2% on the stock market today. Occidental stock fell 6.1%. Anadarko stock lost 3%.

Occidental Busy Securing Anadarko Deal

"We look forward to signing a merger agreement with Anadarko and realizing value for our stakeholders as soon as possible," Occidental said in a release following Chevron's announcement.

Occidental got help from Warren Buffett's Berkshire Hathaway (BRKB), which agreed to invest $10 billion in the company to help raise the cash needed for the Anadarko deal. Nearly 80% of the deal will be funded in cash, sources told Bloomberg, so a shareholder vote is not required.

Occidental has been busy making plans for Anadarko's assets.

The company's jet was spotted in the Hague Netherlands, home of Royal Dutch Shell (RDSA), Wednesday, according to Bloomberg. Officials are likely discussing Shell's joint venture with Anadakro in the Permian.

Total SA (TOT) has already agreed to acquire Anadarko's African assets for $8.8 billion once the Occidental-Anadarko deal is competed.

Drillinginfo M&A analyst Andrew Dittmar said the Berkshire investment and the Total deal were key to winning the day.

"Occidental management fought hard on this one and pulled out all the stops to make their deal with Anadarko happen," Dittmar said in a statement. "Now they will need to execute and show that the assets, including the centerpiece Delaware, was worth the price."

Follow Gillian Rich on Twitter @IBD_GRich for energy news and more.

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The post Chevron Won't Raise Anadarko Bid To Trump Occidental Offer appeared first on Investor's Business Daily.