Arco, BP Amoco Boards Expected to Meet Today to Discuss Merger
The boards of Atlantic Richfield Co. and BP Amoco are expected to meet separately today to contemplate a merger of the two oil companies in a deal rumored to total $25 billion or more in stock.
Arco and BP Amoco declined to comment on their plans Tuesday.
If a merger agreement is hammered out, Los Angeles-based Arco, the seventh-largest U.S. oil company, would join an oil giant that was created only three months ago through the marriage of British Petroleum of London with Amoco Corp. of Chicago.
These mergers are part of an oil industry consolidation that is fed by the need to cut costs in the face of low oil prices. In December, Exxon Corp. and Mobil Corp. announced a $48-billion merger and French oil company Total agreed to buy Belgian refiner Petrofina for $11.8 billion.
But BP got hitched to Amoco because “clearly there are benefits to size” when competing around the globe, BP Amoco Chief Executive John Browne said in a speech last month in London.