Occidental Oil, Shamrock Talk of Merging

Occidental Petroleum Corp. and Diamond Shamrock Corp. said today that they are discussing “a possible business combination,” a merger that would create the nation’s seventh-largest oil company.

The announcement confirmed speculation that flared on Wall Street when both companies asked the New York Stock Exchange earlier in the day to suspend trading in their stock, pending news announcements.

In a joint statement, the companies said their boards of directors will meet Monday to discuss a possible corporate marriage.

A source close to the parties, who spoke only under the condition that he not be identified, said he considered it was “an accomplished fact that Occidental would either acquire or merge with Diamond Shamrock.”

Occidental, based in Los Angeles, is the nation’s 13th-largest oil company on the basis of assets and the 10th largest by sales, according to rankings by the Oil & Gas Journal, a magazine that covers the petroleum Industry. Diamond Shamrock, with headquarters in Dallas, is the 19th-largest oil company on the basis of assets and ranks 26th on the basis of revenue.

A combination would make the merged company the seventh largest on the basis of sales.