FTC Gives Green Light to BP-Amoco
The Federal Trade Commission on Wednesday conditionally approved British Petroleum Co.'s planned acquisition of Amoco Corp., a deal that would create the largest U.S. gasoline retailer and one of the largest oil companies in the world.
To ensure consumers won’t be hurt in the $49-billion merger, the FTC required the companies to sell off in the next six months 134 gasoline stations and nine terminals that store gasoline and other petroleum products.
In addition, the companies must allow 1,600 independent gasoline stations to switch brands if they wish.
The companies said they plan to close their deal today. Shares of the merged company will trade on the New York and London stock exchanges beginning Monday.
“We now look forward to creating a great enterprise,” the companies said.
BP-Amoco will rank as the world’s third-biggest oil company behind the proposed merger between Exxon Corp. and Mobil Corp.--which the FTC is only now starting to review--and Royal Dutch/Shell.
While the BP-Amoco merger was completed by the end of the year as company officials had wanted, an increasingly consolidated oil industry may raise the bar that future oil mergers will have to clear, according to FTC Chairman Robert Pitofsky.
“The later [oil merger] arrivals may face a different market situation and, therefore, [different] regulatory review than the first ones who go through,” he said in a telephone interview.
Pitofsky said he was talking about the broad antitrust principle that at some point industries become so concentrated that regulators must apply the brakes.
The FTC decides whether to permit mergers based on whether consumers will be hurt from the reduced competition.
Under terms of the deal announced in August, BP will exchange 3.97 of its American depositary receipts for each Amoco share.
On the New York Stock Exchange, Amoco shares fell $3.25 to close at $54.75, while BP’s ADRs fell $6.75 to close at $83.19.