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Chevron, Phillips deal?
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September 21, 1999: 7:02 a.m. ET
Oil companies mulling joint venture, deny merger talk - report
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NEW YORK (CNNfn) - Chevron Corp. and Phillips Petroleum Co. are discussing a joint venture in the petrochemical business but an outright merger of the companies is not imminent, the New York Times reported Tuesday.
Phillips, the nation's No. 7 oil company, has announced plans to sell its natural gas processing division before year-end but sources close to the companies told the newspaper that Chevron will not be a likely buyer. Rather, the companies are more likely to do a deal in petrochemicals, the newspaper said.
Phillip's revenues from its chemical business totaled $2.4 billion last year, with Chevron (CHV) pulling in $3 billion.
The pressure for firms in the energy sector to merge has been alleviated somewhat since crude oil prices have bounced back, the newspaper said, but added that the petrochemicals business has been weaker.
The Sunday Times of London reported that Chevron was in talks to buy Phillips (P) in a deal worth some $16.5 billion. Phillips stock rose $2.8125 Monday. Both companies declined to comment on possible merger talks.
A merger or venture would be the latest in the oil industry. Big deals that have been announced include British Petroleum's acquisition of Amoco and Totalfina's agreement to acquire Elf Aquitaine for $48 billion. Exxon Corp. agreed last year to buy Mobil for about $80 billion in the biggest merger ever but the deal has not won final approval from regulators.
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