Newspaper article THE JOURNAL RECORD

British Petroleum, Amoco Deal Receives U.S. Approval

Newspaper article THE JOURNAL RECORD

British Petroleum, Amoco Deal Receives U.S. Approval

Article excerpt

WASHINGTON -- British Petroleum, the world's third-largest oil company, received U.S. approval to acquire Amoco for $62 billion -- a combination that creates the biggest U.S. gasoline retailer.

The U.S. Federal Trade Commission cleared the way for London- based BP to acquire Amoco, the fifth-largest U.S. oil company, after the two companies agreed to sell 134 retail gasoline stations and free from supply contracts 1,600 independently owned stations that carry the BP or Amoco logos in 30 local markets in 11 states. The combined company will be the world's third-largest publicly trade oil company.

BP and Amoco also agreed to sell nine petroleum-products storage terminals to meet FTC concerns that the combined company could influence wholesale prices in those cities. The FTC's approval, in a unanimous vote by the four commissioners, clears the way for the two companies to close the transaction today at 2 p.m. Washington time. "When we announced the merger in August, we set ourselves the demanding target of closure by year-end. We are delighted that we will achieve that," BP Chairman Sir John Browne and Amoco chairman Lawrence Fuller said in a joint statement. "We now look forward to creating a great enterprise." The FTC said the divestitures resolve concerns by antitrust enforcers that the combined company, to be known as BP-Amoco Plc, would lessen wholesale gasoline competition in 30 markets, in Ohio and the U.S. Southeast. FTC Chairman Robert Pitofsky, signaling that Exxon's proposed $83 billion acquisition of Mobil will get close regulatory scrutiny, said the BP-Amoco combination was part of a "significant trend toward concentration in the petroleum industry." The combination of Exxon and Mobil would create the world's largest publicly traded oil company. Royal/Dutch Shell Group would drop to the No. 2 spot. Even though the BP-Amoco combination "involves companies of enormous size," their operations "rarely overlap in a way that threatens competition," Pitofsky said. He also stressed that "megamergers in all industries warrant close antitrust review." In a Bloomberg Forum, Pitofsky described the divestitures as "modest" remedies intended to end the few antitrust problems created by what he termed "an end-to-end merger. …

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