Chinese firm halts disputed bid for Unocal

SAN FRANCISCO -- China's government-controlled CNOOC Ltd. withdrew its $18.4 billion bid for Unocal Corp. yesterday, ending a politically charged takeover battle that highlighted the United States' growing apprehension about the economic rise of the world's most populous country.

CNOOC's retreat clears the way for Chevron Corp., the second-largest US oil company, to complete its acquisition of Unocal next week, even though its offer is worth $700 million less.

Chevron had several factors working in its favor -- regulatory clearance, the support of Unocal's board and the backing of US lawmakers, who questioned whether economic and national security interests would be threatened if a company with significant ties to China's Communist government were to buy a major US oil company.

In a strongly worded statement, Hong Kong-based CNOOC said it might have raised its bid even higher, if not for the political backlash.

''The unprecedented political opposition . . . was regrettable and unjustified," CNOOC said. ''This political environment has made it very difficult for us to accurately assess our chance of success, creating a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction."

Chevron spokesman Don Campbell declined to comment on CNOOC's remarks, saying the company is focused on assuring a smooth transition after its Unocal acquisition is complete.

Unocal shareholders are scheduled to formally vote on the offer Aug. 10.

Yesterday's resolution pleased investors. Chevron's shares gained $1.13 to close at $59.56 on the New York Stock Exchange, where CNOOC's shares rose $4.153to $73.49 and Unocal's shares edged up 16 cents to $64.53.