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EU clears Exxon-Mobil
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September 29, 1999: 8:07 a.m. ET
European antitrust chiefs OK largest oil merger, as well as BP Amoco-Arco deal
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LONDON (CNNfn) - European regulators Wednedsay gave the green light to two mega-deals in the oil industry -- the record $80 billion combination of Exxon and Mobil, and the $26 billion pact meshing BP Amoco with Arco, attaching a range of widely anticipated concessions to their preliminary approval.
Exxon and Mobil are on course to complete their merger by the end of the year after accepting the terms, although they still face scrutiny from the U.S. Federal Trade Commission.
Among the concessions, Mobil agreed to dissolve the bulk of its European fuels joint venture with BP Amoco. Mobil has a 30 percent stake in the venture, and analysts expect BP Amoco to buy out its partner for around $1 billion.
At one point, Mobil (MOB) reportedly proposed retaining the stake in a "blind trust" to ensure no conflict of interest arose in its combined Exxon-Mobil operations in Europe and its BP Amoco joint venture.
The European Commission also required Mobil to sell its 20 percent stake in Aral, a German-based gas station chain operator owned in conjunction with the conglomerate Veba (FVEB).
Antitrust chiefs also demanded a range of smaller disposals, including parts of the two companies' aviation fuels business and a Dutch natural gas marketing company.
The BP Amoco acquisition was waived through with only minor demands concerning ownership of natural gas pipelines in the U.K. area of the North Sea.
Exxon (XON), Mobil and BP Amoco had been in separate talks with the European Commission, the Brussels-based executive arm of the European Union, since June in a bid to secure approval.
All three companies waived their right to official hearings on the deals in a bid to speed the process.
BP Amoco (BP.A) shares quickly recovered a 1.1 percent session loss following the announcement to trade flat at 1,065 pence.
In the United States, the companies are still negotiating with the U.S. Federal Trade Commission in an effort to address antitrust concerns.
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