Fitch might cut Occidental Petroleum

Fitch Ratings said it placed the ratings of Occidental Petroleum Corp. on rating watch negative following its announced offer to acquire the outstanding stock of Anadarko Petroleum Corp. in a cash and stock deal valued at $76 per share, or about $57 billion.

The agency said that while the transaction would ultimately strengthen Occidental's long-term business profile through a significant increase in size, scale and diversification, in the short to medium term, Fitch expects it will pressure the company’s credit profile, given the high cash consideration (50%), and the need to debt finance a material part of the offer.

In addition, there is execution risk around planned asset sales of $10 billion to $15 billion, which will be used to de-lever after deal close, Fitch added.

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