For purposes of rendering its opinion, Goldman Sachs, with the consent of the Anadarko Board, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, Goldman Sachs, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the consent of the Anadarko Board that the adjusted Occidental forecasts, the Anadarko management forecast and the Synergies were reasonably prepared on a basis reflecting the best then available estimates and judgments of the management of Anadarko. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of Anadarko or Occidental or any of their respective subsidiaries and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger would be obtained without any adverse effect on Anadarko or Occidental or on the expected benefits of the merger in any way meaningful to Goldman Sachs’ analysis. Goldman Sachs also assumed that the merger would be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.
Goldman Sachs’ opinion did not address the underlying business decision of Anadarko to engage in the merger, or the relative merits of the merger as compared to any strategic alternatives that may be available to Anadarko; nor did it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addressed only the fairness from a financial point of view to the holders (other than Occidental, Berkshire Hathaway and their respective affiliates) of shares of Anadarko common stock, as of the date of its written opinion, of the merger consideration to be paid to such holders pursuant to the merger agreement. Goldman Sachs did not express any view on, and its opinion did not address, any other term or aspect of the merger agreement or merger or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger, including, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of Anadarko; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Anadarko, or any class of such persons, in connection with the merger, whether relative to the merger consideration to be paid to the holders (other than Occidental, Berkshire Hathaway and their respective affiliates) of shares of Anadarko common stock pursuant to the merger agreement or otherwise. Goldman Sachs did not express any opinion as to the prices at which shares of Occidental common stock would trade at any time or as to the impact of the merger on the solvency or viability of Anadarko or Occidental or the ability of Anadarko or Occidental to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of its written opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Anadarko Board in connection with its consideration of the merger and the opinion does not constitute a recommendation as to how any holder of shares of Anadarko common stock should vote with respect to the merger or any other matter. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.
Summary of Financial Analyses
The following is a summary of the material financial analyses presented by Goldman Sachs to the Anadarko Board in connection with rendering to the Anadarko Board the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 8, 2019 and is not necessarily indicative of current or future market conditions.
Implied Premia and Multiple Analysis
Goldman Sachs calculated and compared certain implied premia and multiples using the closing price for the shares of Anadarko common stock on April 11, 2019, the last trading day prior to announcement of the previously proposed acquisition of Anadarko by Chevron, the closing price for the shares of Occidental common
stock on April 11, 2019, the closing price for the shares of Occidental common stock on May 8, 2019, the last trading day prior to announcement of the merger with Occidental, and the implied value of the merger consideration to be paid by Occidental for each share of Anadarko common stock pursuant to the merger agreement. For purposes of its analysis, Goldman Sachs calculated an implied value for the merger consideration of $76.67 (the “Implied Merger Consideration Value”) by adding (i) an implied value for the stock consideration per share (calculated by multiplying the exchange ratio of 0.2934 pursuant to the merger agreement by $60.21, the closing price for the shares of Occidental common stock on May 8, 2019), and (ii) the cash consideration of $59.00 per share of Anadarko common stock.
Goldman Sachs calculated the following:
| • | The premium represented by the Implied Merger Consideration Value of $76.67 per share of Anadarko common stock relative to: |
| • | $46.80, the closing price of the shares of Anadarko common stock on April 11, 2019 (the “Anadarko Undisturbed Closing Price”); |
| • | $45.25, the volume weighted average price (“VWAP”) of shares of Anadarko common stock over the 20-trading-day period ended April 11, 2019 (the “Anadarko 20-Day VWAP”); |
| • | $44.78, the VWAP of shares of Anadarko common stock over the 30-trading-day period ended April 11, 2019 (the “Anadarko 30-Day VWAP”); |
| • | $75.86, the highest daily closing price of shares of Anadarko common stock over the 52-week period ended May 8, 2019 (the “Anadarko 52-Week High”); and |
| • | $40.57, the lowest daily closing price of shares of Anadarko common stock over the 52-week period ended May 8, 2019 (the “Anadarko 52-Week Low”). |
The results of these calculations are as follows:
Anadarko Reference Share Price |
Implied Premium Represented by the Implied Merger Consideration Value of $76.67 per Anadarko Share |
||
Anadarko Undisturbed Closing Price of $46.80 |
63.8 | % |
|
Anadarko 20-Day VWAP of $45.25 |
69.4 | % |
|
Anadarko 30-Day VWAP of $44.78 |
71.2 | % |
|
Anadarko 52-Week High of $75.86 |
1.1 | % |
|
Anadarko 52-Week Low of $40.57 |
89.0 | % |
|
In addition, Goldman Sachs calculated implied equity values for Occidental by multiplying each of $67.18, the closing price for the shares of Occidental common stock on April 11, 2019 (“Occidental Undisturbed Closing Price”), and $60.21, the closing price for the shares of Occidental common stock on May 8, 2019 (“Occidental Pre-Announcement Closing Price”), by the total number of fully diluted shares of Occidental common stock outstanding as of April 30, 2019, calculated based on the Occidental Undisturbed Closing Price and the Occidental Pre-Announcement Closing Price, as applicable, and outstanding equity information for Occidental provided and approved for Goldman Sachs’ use by Anadarko management. Goldman Sachs then calculated implied enterprise values for Occidental by adding to each of the implied equity values calculated for Occidental, Occidental’s net debt (calculated as debt less cash and cash equivalents (“net debt”)) and non-controlling interests, each as of March 31, 2019, as reflected in Occidental’s consolidated balance sheet as of that date.
Goldman Sachs also calculated implied equity values for Anadarko by multiplying each of the Anadarko Undisturbed Closing Price and the Implied Merger Consideration Value, by the total number of fully diluted shares of Anadarko common stock outstanding as of May 2, 2019, calculated based on the Anadarko Undisturbed Closing Price and the Implied Merger Consideration Value, as applicable, and outstanding equity information for Anadarko provided and approved for Goldman Sachs’ use by Anadarko management. Goldman Sachs then calculated implied enterprise values for Anadarko by adding to each of the implied equity values calculated for Anadarko, Anadarko’s (i) consolidated net debt as of March 31, 2019, as reflected in Anadarko’s consolidated balance sheet as of that date and (ii) non-controlling interests in Western Midstream Partners, L.P. as of May 8, 2019, calculated using publicly available information and information provided by Anadarko management.
Using the foregoing, Goldman Sachs calculated the following multiples:
| • | The implied enterprise value for Occidental, based on both the Occidental Undisturbed Closing Price and the Occidental Pre-Announcement Closing Price, as a multiple of the EBITDAX of Occidental on a stand-alone basis for calendar years 2019 and 2020, as reflected in (i) the median estimates published by the Institutional Brokers’ Estimate System (“IBES Estimates”) for Occidental and (ii) the adjusted Occidental standalone forecast. |
The results of these calculations are as follows:
Occidental Enterprise Value / EBITDAX |
||||||
Metric |
Occidental Undisturbed Closing Price |
Occidental Pre-Announcement Closing Price |
||||
2019E EBITDAX (IBES Estimates) |
6.9x | 6.3x | ||||
2020E EBITDAX (IBES Estimates) |
6.7x | 6.1x | ||||
2019E EBITDAX (Adjusted Occidental Standalone Forecast) |
8.2x | 7.5x | ||||
2020E EBITDAX (Adjusted Occidental Standalone Forecast) |
7.6x | 6.9x | ||||
| • | The implied enterprise value for Anadarko based on both the Anadarko Undisturbed Closing Price and the Implied Merger Consideration Value as a multiple of the estimated EBITDAX of Anadarko for calendar years 2019 and 2020, as reflected in (i) the IBES Estimates for Anadarko and (ii) the Anadarko management forecast. |
The results of these calculations are as follows:
Anadarko Enterprise Value / EBITDAX |
||||||
Metric |
Anadarko Undisturbed Closing Price |
Implied Merger Consideration Value |
||||
2019E EBITDAX (IBES Estimates) |
5.6x | 7.4x | ||||
2020E EBITDAX (IBES Estimates) |
5.2x | 7.0x | ||||
2019E EBITDAX (Anadarko Management Forecast) |
5.9x | 7.9x | ||||
2020E EBITDAX (Anadarko Management Forecast) |
5.3x | 7.0x | ||||
Based on the foregoing, Goldman Sachs also calculated the following multiples:
| • | Each of the Occidental Undisturbed Closing Price and the Occidental Pre-Announcement Closing Price as a multiple of estimated CFPS of Occidental on a stand-alone basis for calendar years 2019 and 2020, as reflected in (i) the IBES Estimates for Occidental and (ii) the adjusted Occidental standalone forecast. |
The results of these calculations are as follows:
Occidental Price / CFPS |
||||||
Metric |
Occidental Undisturbed Closing Price |
Occidental Pre-Announcement Closing Price |
||||
2019E CFPS (IBES Estimates) |
6.4x | 5.8x | ||||
2020E CFPS (IBES Estimates) |
6.5x | 5.8x | ||||
2019E CFPS (Adjusted Occidental Standalone Forecast) |
7.6x | 6.8x | ||||
2020E CFPS (Adjusted Occidental Standalone Forecast) |
7.3x | 6.5x | ||||
| • | Each of the Anadarko Undisturbed Closing Price and the Implied Merger Consideration Value as a multiple of estimated CFPS of Anadarko for calendar years 2019 and 2020, as reflected in (i) the IBES Estimates for Anadarko and (ii) the Anadarko management forecast. |
The results of these calculations are as follows:
Anadarko Price / CFPS |
||||||
Metric |
Anadarko Undisturbed Closing Price |
Implied Merger Consideration Value |
||||
2019E CFPS (IBES Estimates) |
3.5x | 5.8x | ||||
2020E CFPS (IBES Estimates) |
3.4x | 5.6x | ||||
2019E CFPS (Anadarko Management Forecast) |
4.2x | 6.9x | ||||
2020E CFPS (Anadarko Management Forecast) |
3.4x | 5.5x | ||||
Illustrative Discounted Cash Flow Analysis
Goldman Sachs performed an illustrative discounted cash flow analysis of Anadarko to derive a range of illustrative present values per share of Anadarko common stock, as of March 31, 2019.
Using mid-year convention and discount rates ranging from 8.5% to 9.5%, reflecting estimates of Anadarko’s weighted average cost of capital, Goldman Sachs discounted to present value as of March 31, 2019 (i) estimates of the unlevered free cash flows to be generated by Anadarko for the period from April 1, 2019 to December 31, 2025, as reflected in the Anadarko management forecast, and (ii) a range of illustrative terminal values for Anadarko as of December 31, 2025, calculated by applying terminal year multiples of enterprise value to LTM EBITDAX ranging from 5.0x to 6.5x to estimated EBITDAX of Anadarko for 2025, as reflected in the Anadarko management forecast (which analysis implied perpetuity growth rates ranging from negative 0.6% to positive 2.3%). Goldman Sachs derived the discount rates referenced above by application of the capital asset pricing model (“CAPM”), which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The range of terminal year multiples of enterprise value to EBITDAX was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Anadarko management forecast and the Anadarko Undisturbed Closing Price 2019E EBITDAX multiples as calculated by Goldman Sachs and as set forth above under “—Implied Premia and Multiple Analysis”.
Goldman Sachs derived a range of illustrative enterprise values for Anadarko by adding the ranges of present values it derived as described above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived (i) the net debt of Anadarko (including pension shortfall and post-retirement and asset retirement obligations) as of March 31, 2019, as reflected in Anadarko’s consolidated balance sheet as of that date, both with and without giving effect to the impact of the $1 billion termination fee paid by Anadarko in connection with the termination of its prior merger agreement with Chevron (the “Chevron termination fee”), and (ii) the midpoint valuation of the non-controlling interests in Western Midstream Partners, L.P. Goldman Sachs valued the non-controlling interests in Western Midstream Partners, L.P. using the Anadarko management forecast and information provided by Anadarko management by performing a dividend discount analysis using discount rates ranging from 8.0% to 9.5%, reflecting estimates of Western Midstream Partners, L.P.’s cost of equity, to discount to present value, as of March 31, 2019 (i) the estimated distributions to Western Midstream Partners, L.P.’s unitholders for the period from April 1, 2019 to December 31, 2025, reflected in the Anadarko management forecast, and (ii) a range of illustrative terminal values for Western Midstream Partners, L.P. as of December 31, 2025, calculated by applying LTM dividend yields ranging from 7.0% to 9.0% to the estimated distributions to Western Midstream Partners, L.P.’s unitholders in 2025, as reflected in the Anadarko management forecast, which analysis resulted in a range of illustrative equity values of Western Midstream Partners, L.P. of $16.9 billion to $21.4 billion. Goldman Sachs derived the discount rates referenced above by application of the CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. The range of LTM dividend yields was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account Western Midstream Partners, L.P.’s historical LTM dividend yields over the five-year period ending May 8, 2019.
Goldman Sachs then divided the range of illustrative equity values it derived for Anadarko as described above by the fully diluted shares of Anadarko common stock outstanding as of May 2, 2019, calculated based on equity information for Anadarko as provided by Anadarko management, to derive a range of illustrative present values per share of Anadarko common stock of $41.92 to $69.48 (calculated without reflecting the impact of the Chevron termination fee) and $39.93 to $67.50 (calculated reflecting the impact of the Chevron termination fee).
Illustrative Present Value of Future Stock Price Analysis
Goldman Sachs performed an illustrative analysis to derive a range of illustrative present values per share of Anadarko common stock as of March 31, 2019 based on theoretical future prices calculated by Goldman Sachs for the shares of Anadarko common stock (the “Illustrative Present Value of Future Stock Price Analysis”).
Goldman Sachs derived a range of theoretical future values per share for the shares of Anadarko common stock as of December 31, 2019, 2020, 2021, 2022, 2023 and 2024 by applying illustrative one-year forward price to CFPS multiples of 3.5x to 5.5x to estimates of the CFPS of Anadarko for 2020, 2021, 2022, 2023, 2024 and 2025, respectively, as reflected in the Anadarko management forecast. By applying a discount rate of 10.8%, reflecting an estimate of Anadarko’s cost of equity, and, for the dividends only, using a mid-year convention, Goldman Sachs discounted to present value as of March 31, 2019 both the theoretical future values per share it derived for Anadarko and the estimated dividends to be paid per share of Anadarko common stock through the end of the applicable year as reflected in the Anadarko management forecast, to yield illustrative present values per share of Anadarko common stock ranging from $44.63 to $71.92 (calculated without reflecting the impact of the Chevron termination fee) and $42.65 to $69.94 (calculated reflecting the impact of the Chevron termination fee).
The illustrative one-year forward price to CFPS multiples used in the foregoing analysis were derived by Goldman Sachs using its professional judgement and experience, taking into account historical CFPS multiples for Anadarko and the 2019E CFPS multiples for Anadarko based on the Anadarko Undisturbed Closing Price as calculated by Goldman Sachs and as set forth above under “—Implied Premia and Multiple Analysis”. Goldman Sachs derived the discount rate used in the foregoing analysis by application of the CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally.
Premia Paid Analysis
Goldman Sachs analyzed the premia paid in certain acquisition transactions listed below announced since August 1998 with a transaction enterprise value of $3 billion or greater involving publicly traded target companies in the oil and gas exploration and production industry. With respect to each of these transactions, Goldman Sachs calculated the implied premium of the price paid in the transactions relative to the last undisturbed closing share price of the target company. The following table presents the results of this analysis:
Announcement Date |
Target |
Acquirer |
Premium to 1-Day Prior to Announcement |
||||||
All-Stock Consideration Transactions: |
|||||||||
5/11/15 |
Rosetta Resources Inc. |
Noble Energy, Inc. |
37.7 | % |
|||||
3/28/18 |
RSP Permian, Inc. |
Concho Resources Inc. |
29.1 | % |
|||||
4/1/99 |
Atlantic Richfield Company |
BP Amoco Company |
26.0 | % |
|||||
12/14/09 |
XTO Energy Inc. |
ExxonMobil Corporation |
24.6 | % |
|||||
8/11/98 |
Amoco Corporation |
British Petroleum Company p.l.c. |
22.7 | % |
|||||
2/21/13 |
Berry Petroleum Company |
Linn Energy, LLC |
19.8 | % |
|||||
8/14/18 |
Energen Corporation |
Diamondback Energy, Inc. |
19.0 | % |
|||||
5/16/16 |
Memorial Resource Development Corp. |
Range Resources Corporation |
17.1 | % |
|||||
12/1/98 |
Mobil Corporation |
Exxon Corporation |
15.1 | % |
|||||
Mixed Consideration Transactions: |
|||||||||
4/4/05 |
Unocal Corporation |
Chevron Corporation |
50.7 | % |
|||||
4/15/10 |
Mariner Energy, Inc. |
Apache Corporation |
44.9 | % |
|||||
12/5/12 |
Plains Exploration & Production Company |
Freeport-McMoRan Copper & Gold Inc. |
38.7 | % |
|||||
6/19/17 |
Rice Energy Inc. |
EQT Corporation |
37.3 | % |
|||||
11/9/10 |
Atlas Energy, Inc. |
Chevron Corporation |
36.6 | % |
|||||
11/1/09 |
Encore Acquisition Company |
Denbury Resources Inc. |
34.9 | % |
|||||
1/16/17 |
Clayton Williams Energy, Inc. |
Noble Energy, Inc. |
33.7 | % |
|||||
Although none of the selected transactions is directly comparable to the transaction contemplated by the merger agreement, the target companies in the selected transactions were companies with operations that, for the purposes of analysis, may be considered similar to certain of Anadarko’s results and product candidate profile, and as such, for purposes of analysis, the selected transactions may be considered similar to the transaction contemplated by the merger agreement.
Based on its review of the foregoing data and its professional judgment and experience, Goldman Sachs applied a range of illustrative premia of 15.1% to 50.7% to the Anadarko Undisturbed Closing Price of $46.80. This analysis resulted in a range of implied values per share of Anadarko common stock of $53.88 to $70.52 (calculated without reflecting the impact of the Chevron termination fee) and $51.90 to $68.54 (calculated reflecting the impact of the Chevron termination fee).
Illustrative Present Value of Future Stock Price – Occidental Pro Forma
Goldman Sachs performed an illustrative Present Value of Future Stock Price analysis by comparing (i) a range of illustrative present values of 0.2934 of a share of Occidental common stock on a pro forma basis giving effect to the merger, as of March 31, 2019, based on theoretical future prices calculated by Goldman Sachs for 0.2934 of a share of Occidental common stock as of December 31, 2019, 2020 and 2021 plus, in each case, the $59.00 per share of Anadarko common stock to be received for each share of Anadarko common stock in the proposed merger, to (ii) a range of illustrative present values per share of Anadarko common stock derived by performing the Illustrative Present Value of Future Stock Price Analysis for Anadarko on a standalone basis calculated as described above based on theoretical future prices for a share of Anadarko common stock as of December 31, 2019, 2020 and 2021 (without reflecting the impact of the Chevron termination fee).
Goldman Sachs derived a range of theoretical future values per share for the shares of Occidental common stock on a pro forma basis giving effect to the merger, as of December 31 of each of 2019, 2020 and 2021 by applying illustrative one-year forward price to CFPS multiples of 3.5x to 5.5x to estimates of the CFPS of Occidental on a pro forma basis for each of 2020, 2021 and 2022, the years for which estimates of the CFPS of Occidental on a pro forma basis were reflected in the adjusted Occidental pro forma forecast. By applying a discount rate of 9.0%, reflecting an estimate of Occidental’s cost of equity on a pro forma basis, Goldman Sachs discounted to present value as of March 31, 2019 both the theoretical future values per share it derived for Occidental on a pro forma basis and the estimated dividends to be paid per share of Occidental common stock on a pro forma basis through the end of the applicable year as reflected in the adjusted Occidental pro forma forecast, to yield illustrative present values per share of Occidental common stock on a pro forma basis. Goldman Sachs then multiplied this range by the exchange ratio of 0.2934 pursuant to the merger agreement and added to the results the cash consideration of $59.00 per share pursuant to the merger agreement to yield illustrative present values ranging from $73.02 to $80.36 for the 0.2934 of a share of Occidental common stock and the $59.00 in cash to be received for each share of Anadarko common stock in the merger. Goldman Sachs compared the resulting range of illustrative present values with the range of illustrative present values per share of Anadarko common stock on a standalone basis of $44.83 to $71.92 derived by performing the Illustrative Present Value of Future Stock Price Analysis for Anadarko on a standalone basis described above based on theoretical future prices for a share of Anadarko common stock as of December 31, 2019, 2020 and 2021 using estimates of the CFPS of Anadarko for years 2020, 2021 and 2022 (calculated without reflecting the impact of the Chevron termination fee).
The illustrative one-year forward price to CFPS multiples used in the foregoing analysis were derived by Goldman Sachs using its professional judgement and experience, taking into account the CFPS multiples calculated by Goldman Sachs as set forth above under “—Implied Premia and Multiple Analysis”. Goldman Sachs derived the discount rate used in the foregoing analysis by application of the CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally.
General
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its
analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Anadarko or the merger.
Goldman Sachs prepared these analyses for purposes of providing its opinion to the Anadarko Board as to the fairness from a financial point of view to the holders (other than Occidental, Berkshire Hathaway and their respective affiliates) of shares of Anadarko common stock, as of the date of its written opinion, of the merger consideration to be paid to such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon projections of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Anadarko, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.
The merger consideration was determined through arm’s-length negotiations between Anadarko and Occidental and was approved by the Anadarko Board. Goldman Sachs provided advice to Anadarko during these negotiations. Goldman Sachs did not, however, recommend any specific consideration to Anadarko or the Anadarko Board or that any specific consideration constituted the only appropriate consideration for the merger.
As described above, Goldman Sachs’ opinion was one of many factors taken into consideration by the Anadarko Board in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the delivery of its fairness opinion to the Anadarko Board and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex C to this proxy statement/prospectus.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Anadarko, Occidental, any of their respective affiliates and third parties, including Berkshire Hathaway and its affiliates and portfolio companies, or any currency or commodity that may be involved in the merger. Goldman Sachs acted as financial advisor to Anadarko in connection with, and has participated in certain of the negotiations leading to, the merger. Goldman Sachs expects to receive fees for its services in connection with the merger, the principal portion of which is contingent upon completion of the merger, and Anadarko has agreed to reimburse certain of Goldman Sachs’ expenses arising, and indemnify Goldman Sachs against certain liabilities that may arise, out of Goldman Sachs’ engagement. Goldman Sachs has provided certain financial advisory and/or underwriting services to Anadarko and/or its affiliates from time to time for which its Investment Banking Division has received, and may receive, compensation, including having acted as co-financial advisor in connection with a restructuring transaction involving Western Gas Equity Partners, LP (now known as Western Midstream Partners, LP) and Western Gas Partners LP (now known as Western Midstream Operating, LP), subsidiaries of Anadarko, in February 2019. During the two-year period ended May 9, 2019, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Anadarko and/or its affiliates of approximately $500,000. During the two-year period ended May 9, 2019, Goldman Sachs has not recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Occidental and/or its affiliates. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Berkshire Hathaway and/or its affiliates from time to time for which its Investment Banking Division has received, and may receive, compensation, including having acted as co-financial advisor in connection with a sale of USG Corporation, a subsidiary of Berkshire Hathaway, in April 2019; as joint bookrunner with respect to the offering of Berkshire Hathaway’s 4.250% Guaranteed Global Notes due 2049 (aggregate principal amount $750,000,000) in March 2019; as joint bookrunner with respect to the offering of Berkshire Hathaway’s 4.250% Guaranteed Global Notes due 2049 (aggregate principal amount $1,250,000,000) in January 2019; as joint bookrunner with respect to the offering of Berkshire Hathaway’s 4.200% Guaranteed Global Notes due 2048 (aggregate principal amount $2,350,000,000) in August 2018; as joint bookrunner with
