CNOOC's fully financed offer to acquire all of Unocal's outstanding shares for cash at a price of $18.5 billion represents a premium of approximately $1 billion above Chevron's current competing bid and clearly superior value for Unocal shareholders.
They proposed and agreed to a variety of measures to provide further comfort to Unocal's shareholders. In addition, recognising that the transaction would be reviewed by CFIUS, pursuant to the United States Exon-Florio Act, CNOOC initiated a voluntary filing with CFIUS, and proactively committed to take actions with respect to Unocal's U.S. assets as necessary to satisfy CFIUS findings.
CNOOC has given active consideration to further improving the terms of its offer, and would have done so but for the political environment in the U.S. The unprecedented political opposition that followed the announcement of their proposed transaction, attempting to replace or amend the CFIUS process that has been successfully in operation for decades, was regrettable and unjustified. This is especially the case in light of CNOOC's purely commercial objectives and the extensive commitments that CNOOC was prepared to make to address any legitimate concerns U.S. regulators may have had regarding our acquisition. This political environment has made it very difficult for them to accurately assess their chance of success, creating a level of uncertainty that presents an unacceptable risk to their ability to secure this transaction. Accordingly they are reluctantly abandoning their higher offer to the clear disadvantage of Unocal shareholders and employees.