You are here
ChevronTexaco Corp., operator of more than 3,500 convenience stores, has committed $2.5 billion of new equity in Dynegy Inc. in support of its planned acquisition of Enron Corp.
ChevronTexaco, which currently owns approximately 26 percent of Dynegy's outstanding common stock, immediately will invest $1.5 billion in Dynegy in order to fund Dynegy's equity infusion into Enron. The $1 billion balance of ChevronTexaco's equity purchase of Dynegy common stock would be made upon the closing of the Dynegy-Enron merger.
The deal, which is expected to easily gain regulatory approval from the Federal Trade Commission, also allows ChevronTexaco to maintain its three seats on the Dynegy Board of Directors.
"Our equity interest in Dynegy is highly complementary to our larger portfolio of assets and activities, and reflects our strategy to participate in the growing energy convergence marketplace, including wholesale and retail marketing, and trading of energy products and services," said David O'Reilly, chairman and CEO of ChevronTexaco. "Our relationship with Dynegy has proven to be highly beneficial for both companies, and we are optimistic we will continue to see comparable or better performance in the future.
In the event that the merger between Dynegy and Enron is not completed, ChevronTexaco can redeem its shares for $1.5 billion in cash or convert to common shares. In the latter event, ChevronTexaco would own an approximate 36 percent equity interest in Dynegy.