BP Amoco Says FTC Rejected Concessions

BP Amoco’s bid to create the world’s largest non-state-owned oil producer hung in the balance Thursday as a rumbling disagreement with U.S. antitrust officials burst into the open.

The British oil giant confirmed what Washington sources have been saying for several weeks, that the Federal Trade Commission doesn’t like its $26.8-billion bid to buy Los Angeles-based Atlantic Richfield Co. and has rejected concessions offered.

As a result, BP Amoco and Arco decided to force the FTC’s hand, triggering a 20-day regulatory deadline by which the U.S. body must decide to accept the deal or go to court to block it.

“The companies accept that re-triggering the notice could prompt the FTC to seek resolution of the issues through litigation,” they said in a joint statement.

“The companies, however, remain ready to pursue a constructive solution,” they added, saying they were scheduled to meet with the FTC today for further discussions.

BP Amoco’s struggle to hold on to $1 billion a year in potential cost savings and other merger synergies could produce the biggest legal fight the industry has seen since the Supreme Court ruled for the breakup of Standard Oil in 1911.

On Thursday, the FTC maintained its long silence on the subject and declined to comment. But regulatory and industry sources say the commission is concerned the newly combined company would have too much control over Alaska oil prices and, consequently, the West Coast gasoline market.

In order to stop the merger, the antitrust body’s five commissioners must vote to act, then file a complaint in U.S. Federal District Court before the 20 days run out.

The news did not perturb the share prices of the two companies. In New York Stock Exchange trading, Arco shares rose $2 to close at $79 and BP’s American depositary receipts rose 81 cents to close at $57.38.