Unocal OKs Chevron bid after CNOOC's pullout

The two companies, both survivors of California's 19th century oil boom, declared the sale done just hours after a Unocal shareholders meeting in a Los Angeles-area hotel voted to support it, with more than 96 percent in favor.

For San Ramon's Chevron, the deal brings a needed boost to the company's oil and natural gas reserves, helping it compete at a time of tightening supplies and soaring prices. For Unocal, Wednesday's vote spelled the end of the company's 115-year history of independence.

"This is an important milestone for Chevron, and I want to welcome Unocal employees to our company," said Chevron Chief Executive Officer David O'Reilly. "The addition of Unocal strengthens our position as a global energy leader, and together we will be able to accomplish great results," reports SFGate.

According to Reuters, after receiving Unocal shareholders' blessing, Chevron on Wednesday closed its deal to acquire the smaller U.S. oil producer. This comes a week after Chinese oil producer CNOOC Ltd. pulled out of the race to buy Unocal, citing intense political apprehension over the offer.

Chevron itself did not hesitate in attacking the merits of the CNOOC bid when it was launched in late June. But O'Reilly said the company's annoyance was not with China, but over CNOOC's offer being funded by low or no-interest loans that it said were tantamount to state subsidies and the idea that there was no level playing field.

"The criticism of China was unjustified," O'Reilly said.

Now that the dramatic takeover saga is finally over, Chevron's next task will be to successfully integrate Unocal's operations into its own.

Much of the integration will completed this year, with remaining items like back-office consolidation done sometime next year, O'Reilly said.

Once the integration is complete, Chevron expects to enjoy $325 million in cost savings each year, he said.

The company has already accepted 5000 Unocal employees into its fold and expects to offer more jobs to the rest soon, he said. Chevron has tried to keep jobs open at its headquarters and elsewhere so it could minimize job losses at Unocal, O'Reilly said.

The deal will add about 1 percent to 2 percent to Chevron's earnings per share and 6 percent to 7 percent to cash flow per share next year, he said.