Plus a mega deal in the oil industry. Chevron is buying hess. Were going to have the ceos of both Companies Joining us here at post nine momentarily. And one of apples largest suppliers, foxconn, reportedly being investigated by authorities in china. They are said to be conducting tax audit inspections and revving land use of foxconn subsidiaries. That is pressuring sales of apple a bit as we get started with trading 29 minutes from now. Carl . Actually, im going to send it to myself. Thank you, carl. We do start not with the markets itself but with that major deal in the energy sector. Chevron agreeing to acquire hess. Its an all stock transaction, valued at 171 a share before before we see chevron trade this morning. The ratio, 1. 025 shares of chevron and again were going to be speaking to both the gentlemen behind that deal very shortly. Jim, it follows, of course, exxon and pioneer. I am told, however, these two were talking long before that. At least they have been having conversations. My understanding is they date back a long time, but even in terms of getting serious about a potential deal now, it didnt have anything to do with exxon pioneer. Nonetheless, we are seeing significant consolidation monks some major players. I think that theres a sense that oils worth less on wall street than it is in the ground. Thats a great time to buy. One of the undercurrents i do carl, i got to do this. Does mike wirth, the ceo of chevron, believe maybe, you know how we always talk about higher for longer . Does he believe in that for fossil fuel . Higher for longer . I do start thinking that maybe evs are in play here. The reason i say that is because wall street is not valuing these companies as if theyre valuing them as, like, look, theyre going to go away. What weve seen in ev world in the last couple weeks is very telling, and i dont think oils going away. I think oil has been underestimated in terms of how long its going to be with us, and davids been to guyana. Or guyana as those of us who have been there like to call it. I spent a lot of time getting that right. Maybe you correct some people. There we are at one of the exxon thats an exxon deal. They are going to be a partner with exxon. Oh, yeah, thats okay then. Mikes watching right now. They like each other, because they dont name me two Oil Companies that dont like each other. They like each other when they can be producing a Million Barrels of oil a day. They like each other just fine. Some of the adoption forecast getting pushed, the uk pushing back net zero targets as its politically increasingly untenable to have some of these firm deadlines. Unless you get california saying, look, were going to outlaw fossil, what happens to the heres a thought. That musk Conference Call, that echoed all the way to milan where i was, and that was a Conference Call, and david, you were the first to get existential with him. That was a Conference Call where he was worried. I mean, were advertising, and it was like, everyones got he said, basically everyones got one. He was worried about macroeconomic headwinds, not the least of which is higher Interest Rates and we will certainly get to the 5 level of the tenyear. Im sick of that, by the way. Im now focused on 1998. Evs are not in the sentence. When you speak to the executives in the oil industry, they will quickly remind you about chemicals, plastics, jet fuel and on and on from there. Darren woods of exxon is saying, yeah, under our stress scenarios, into the future, we see us going back to 2013 levels. That was thats where they see demand going. Whos the Largest Company in the world in 2013 . I mean, exxon was top five largest in 2013. Thats why you see these kind of deals. We should ask mike and even john hess. I think we will given the opportunity. All i can tell you is that sheffield, i think, sheffield had problems finding an heir to the throne. Johns been around for a long time, and this is a great opportunity to stay on the board. Hes not selling stock and rejoining the board. Thats true. Hes all in. You see more coming . Is there a possibility . Any names you want to share . I saw some i promised to come back from europe with a kinder some idiot downgraded diamondback today, which is higher than clown. I just want to say. You talk about devin and diamondback. I dont know. Is there going to be more consolidation. Rick moncrief has had a bad run at devin. I would hate to see him give up at the bottom. Those two have almost identical market caps. I know. Devins pretty domestic. They dont have a guyana, to quote you. Devon is about just conventional europe. Its not about permian, unlike pioneer, which has got incredible permian. By the way, guyana is incredibly cheap. The break even. Yes. What do you think of that . What do i think of it . Sorry to ask. How was the weather . The weather was okay. Jim, its not just energy today, though, theres deals involving roche and fortive. Im saying that there is a belief that the peak in the ftcs prowess, not that theyve ever had any, but im being kind, that ship has sailed. That titanic has sailed. You are welcome back with an actual merger monday, i think its fair to say, carl. With this deal being the largest, but to your point, vista deal is a 4 billion deal. Weve got roche buying an asset. Im glad. Theres a bit of activity. It doesnt mean that were going to see anything close to record levels, but no, but and jim, it may be, to the point youre making, that companies are a bit more a bit braver when it comes to deciding to Venture Forward in light of the recent losses at the ftc, although frankly, regulatory is still going to figure very prominently in any of the decisions that go towards saying, okay, were going to go forward with a potential deal. But its still there. I think the debacle of the week was unfortunately James Gormans swan song with Morgan Stanley. Hes saying, look, issuance is coming back. M a is coming back. Lo and behold, whos doing this deal . If Morgan Stanley had done this deal three weeks ago, its stock wouldnt be at 72 going to 68. It might be at 78 going to 81. They did kind of miss. Lets get kind of out of it. The average stock reacting to earnings has not been kind. Thats a big piece of mike wilsons treatise over the weekend, that price action on earnings, i think, even wells tallying some of the number of companies that are raising, eight versus the number that are lowering, seven. We had a price target raise in slb, schlumberger. They do set the tenor. Remember, were a podcast, so youre nodding in agreement with me, and no one knows. They do set the tenor, jim. Thank you. Youre welcome. A lot of this revolves around geopolitics as well. Well move on to the middle east. Nbcs jay gray is in tel aviv with the latest. Reporter hey, good morning, carl. Lets talk about the last 24 hours, intense air strikes from idf fighter jets. We know, according to the idf, that at least 320 military targets were hit. They say that includes tunnels and operational control centers. We also know that strike teams have moved across the border. They say theyre going in looking for hostages to clear the area, again, they say, of hamas gunmen. At least one idf soldier was killed, three others wounded from those attacks. The Hamas Ministry of health saying over 400 people were killed overnight in those attacks and 182 of them are children. They say that 12 hospitals and 32 Health Centers have been forced to close due to a lack of fuel. That gets us to the aid coming in on the other end of the gaza strip. We know that 17 trucks moved through yesterday. 20 more today. Theyre carrying muchneeded water, food, medicine. What they dont have is any fuel, and israeli teams are searching these trucks and making sure theres no fuel on board. They have said repeatedly, no fuel is getting into gaza until this war is finished. The white house has said they will continue to see a flow of aid moving through that gate, but the u. N. Says at this pace, its about 4 of what they normally see daily in supplies before the war began. So, its really just a drop in an area that is desperate for any help. They also say that hospitals that are still operating have about two days of fuel left, and we now know, carl, that many of the doctors in those hospitals are carrying out procedures in the operating room, doing it by the right of their cell phones. Thats all they have. Jay, incredible. Well talk maybe later this morning about the number of military assets from the u. S. That are moving closer to the region. Jay gray in tel aviv, thanks. When we come back, chevrons mike wirth and hesss john hess here at post nine. Well talk about their 53 billion deal. Well get to a bunch of calls today on walgreens, pins, salesforce, roku and set up for a very busy week. Cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. 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Joining us first on cnbc, chevron ceo mike wirth, and he is joined by hess ceo john hess. Nice to have you here at post nine. Thank you. I would typically start with the acquirer, asking a question, but john, i really am more curious in some ways as to why youve chosen to sell hess to chevron, why now, why at this price after obviously a company thats born your family name for quite some time and has done quite well in the stock market certainly over the last year . Well, thank you. Its an honor to be here, and you know, this year is the 90th anniversary of our company. Our company started, has a proud history with my father driving a truck during the depression, a secondhand truck, delivering fuel oil in the region, and weve always been guided by making the right longterm decisions for our shareholders. This is the right longterm decision for our shareholders, and at the end of the day, a very compelling one. I think whats important to understand, david, is that hess brings growth to chevron, growth in resource, growth in production, growth in cash flow, and chevron brings us financial strength, financial strength in terms of a strong balance sheet, a diversified portfolio of assets, and industryleading cash returns, so this strategic combination really builds and creates the premier oil and gas Company Position for the Energy Transition. You talk about longterm, and i get that, and im sure your shareholders do too, and they will be able to participate, but my understanding is you guys have known each other for quite some time. You have had conversations years back about this possibility and im curious, john, why now . Its a strategic fit. Mike and i have been talking about it for a couple years, but the pricing never works. Now, the pricing works. And people talk about it. People have to realize that we have the best Growth Portfolio in the business, and if you look at our stock the last five years, we were the best tsr, total shareholder return, over a fiveyear period. Whether its major or whether its independent. And last year, we were up 94 , number two in the s p. So, the prices and the Exchange Ratio converged where it would be on a 20day basis a 10 return, a price that worked for mikes shareholders but also would work for ours. Remember, were getting stock back. Understood, but its pricing that youre it just the timing now is correct because, in part, as you just said its a winwin. And the prices are properly fit. Right. But since our shareholders are getting chevron stock, we get to participate in the upside. Of course. But we also get a higher dividend. Our dividend goes from 1. 75 a share to 6 a share and next year its going to be 6. 50 and yet we still improve the sb Intrinsic Value in chevron. Congratulations to both of you. Im wondering if we cant go back in time a couple years ago. Oil stocks were hated. There was a belief, whether it be esg or lack of growth, that it was finite. Theres some terminal value by 2030, and yet the world has changed. We need oil much more than we realized. The Oil Companies are a little bit better citizens. Maybe it even turns out that the electric vehicle adoption is slower. How many of these determined the idea that, really, just put a lot more of your Company Shares toward fossil . First of all, we believe the future of energy is lower carbon, and we are committed to helping to build a Lower Carbon Energy system. Weve been investing in hydrogen, Carbon Capture and storage, Renewable Fuels and decarbonizing the oil and gas that we use today, reducing the Carbon Footprint of the energy the world uses today. The reality is the Energy System is massive. And it needs to continue running to keep the light on, to keep the trains running and keep the toy trucks delivered for christmas. And so, look, we need to operate in the world that we live in, and that is one that still needs oil and gas delivered by responsible producers. This is a fantastic, exciting deal for us. Its about longterm growth. Its about longterm value, and a continuing commitment to a Lower Carbon Energy system. Is oil still cheaper in the ground than on wall street because of these concerns . When i listen to you, i think to myself, wait a second, maybe all these are buys. Maybe congratulations, tsr, but the fact is people gave up on these. That was a great business. I think theres a lot of upside in these stocks. The multiples are still low. The cash flows are long. The duration on our cash flows, i talked about longterm growth and longterm value, this extends our visible Growth Profile into the 2030s. Weve got leading shareholder distributions. Our Dividend Growth has been 6 . We announced the intent to raise our dividend 8 in the First Quarter of next year, increase our share buyback. Were returning cash to shareholders and still see relatively low multiples compared to the rest of the market. So, we think theres a lot of upside. Doesnt sound like regulatory worries are top of mind. Can you talk about how close a look that got during negotiations . You always talk about that did yo during negotiations. This is an upstream transaction. Theres no refining, no marketing. The oil markets are big. We produce 2 . We have 2 market share in the global oil markets. Our portfolios have really very little overlap at all, and so we dont believe there are any real competition issues here. Well certainly work with the authorities to go through the process, but we so this as good for america. These are two Great American companies that are coming together. Its good for Energy Security, good for the american economy, and we see it as a transaction. Something else on peoples minds is trying to reduce the Carbon Footprint across the board in this world. How do you respond to people who say, its stock but youre buying back a lot of stock to offset what your to a certain extent what youre issuing . You could use your capital more effectively here by continuing to focus on carbon reduction efforts, and youre not doing so. Instead of, youre buying a lot of assets. I would disagree with that, david. We are focused on Lower Carbon Energy. Weve got the largest production and storage of Green Hydrogen project in the u. S. Were the second largest Renewable Fuels producer and were expanding our Renewable Fuels production. Were absolutely committed, and remain committed to building these hour Carbon Energy systems, but the worlds using the energy that it is today, and we can combine and re