CNOOC seeks review of its Unocal merger bid
(Xinhua)
Updated: 2005-07-02 15:43

A spokesman for China National Offshore Oil Company Ltd. (CNOOC) Saturday described the notice that CNOOC has filed with US government as "a volunteer gesture" to seek US review of its merging proposal with Unocal as soon as possible.

CNOOC announced on Friday that it has filed a notice with the Committee on Foreign Investment in the United States (CFIUS) so that the Committee can begin to review CNOOC's proposal to merge with Unocal Corp.

"It's a volunteer notice from CNOOC Ltd. We hope the review will be put onto formal proceedings of CFIUS as soon as possible as we are sure that the transaction is pure commercial," said the CNOOC spokesman.

CNOOC announced early last Thursday that it has proposed a merger with Unocal, a major US oil company, offering 67 US dollars in cash per Unocal share, totaling 18.5 billion US dollars.

The offer is worth 1.5 billion dollars more than that of Chevron. The US-based oil company is the major rival of CNOOC in the takeover bid for Unocal.

If successful, it would be the biggest-ever overseas acquisition for a Chinese company.

According to US foreign investment policy, CNOOC will have to pass the review of the CFIUS, an inter-agency committee chaired by the Secretary of Treasury.

"However, the review proceedings will begin only when Unocal present a formal notice to the CFIUS," said the CNOOC spokesman.

"We have given Unocal certainty with regard to our proposal, which is all cash, and assurances with regard to the regulatory approval process," said Yang Hua, Chief Financial Officer of CNOOC.

CFIUS regulations provide that the Committee will ask Unocal to respond to its questions with respect to the transaction within seven days of the Committee's request.

"Once we have an opportunity to proceed with a CFIUS review, were main confident that we will be able to obtain Exon-Florio clearance by addressing the Committee's concerns. We are cooperating fully and look forward to a formal review conducted in an expeditious manner," Yang said.

To begin the CFIUS review as soon as possible is in order to provide timing certainty to Unocal stockholders for the superior offer, said Yang.

"This filing gives CNOOC the opportunity to comply with all U.S. rules and regulations in an open and transparent manner, and to fully discuss our proposal," Yang said of the notice.

"We welcome this opportunity and believe that once all the facts are known and the commercial purpose and terms of the transaction are fully understood, many initial misimpressions will be corrected, and many doubts and questions will be favorably resolved," Yang said.