Chevron and Anadarko's promise of $2 billion in synergies following their $33 billion merger will likely mean job losses.
Chevron, the world's third-largest energy company expects the deal to enhance its shale, deepwater, and natural gas operations. But companies don't just do deals to make their presence known, they make deals to enhance shareholder value.
"This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion, and will be accretive to free cash flow and earnings one year after close," said Chevron Chairman and CEO Michael Wirth. These"synergies" include $1 billion in pre-tax cost savings — likely to stem from combining departments, eliminating redundant positions, and similar cost-cutting measures. The other $1 billion is expected to come from lower capital spending, or investing less in assets such as oil rigs and drilling equipment. The combined group's attempts to save in both areas are likely means job losses are coming.
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