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Chevron Corp. shares may rise as much as 25 percent during the next 18 months as the company completes its acquisition of White Plains, N.Y.-based Texaco Inc., creating the fourth-largest oil company, Barron's reported.
Chevron agreed last October to buy Texaco for about $44 billion in stock and debt. The shares have risen 12 percent this year. The company's shares have been undervalued compared to its peers in the industry, the report said. The stock trades at about 12.6 times 2001 earnings estimates, compared to about 18.5 times for larger rival Exxon Mobil Corp.
The acquisition, expected to close this summer, will enable Chevron to gain the financial muscle needed to compete with rivals Exxon Mobil, Royal Dutch/Shell Group and BP Plc.