Occidental Petroleum (OXY) - Get Report made a formal proposal to buy Anadarko Petroleum  (APC) - Get Report in a deal that would value the independent oil producer at $57 billion and trump a pending takeover proposal from Chevron Corp.  (CVX) - Get Report

Occidental said it would pay $76 for each Anadarko share, with a combination of $38 in cash and 0.6094 Occidental shares, a price is says represents a 20% premium to the group's pending deal with Chevron. Occidental said its deal would improve free cash flow by $3.5 billion, via cost reductions and synergies, and is superior to Chevron's in both financial and strategic terms.

"Occidental is a leader in using technological innovation to create value, and we will deploy our expertise to enhance the performance and productivity of Anadarko's assets not only in the Permian, but globally," said Vicki Hollub, President and Chief Executive Officer of Occidental. "Occidental and Anadarko have a highly complementary asset portfolio, providing us with a unique opportunity to realize significant operating, cost, and capital allocation synergies and achieve near-term cash flow accretion."

Anadarko shares rose 11.8% following the takeover proposal to change hands at $71.56 each. Chevron shares slipped 2.6% to $118.85 while Occidental was marked 2.4% lower at $60.88.

Chevron said earlier this month that it plans to buy Anadarko for $33 billion in cash and stock. Chevron said it will pay $65 a share to Anadarko shareholders, who will receive 0.3869 a share of Chevron and $16.25 in cash for each Anadarko share. 

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