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Exxon-Mobil deal nears OK
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November 23, 1999: 5:19 p.m. ET
Oil giants said to eye divestiture in effort to win final merger approval from FTC
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NEW YORK (CNNfn) - On the eve of the first anniversary of the announcement of the proposed merger between Exxon Corp. and Mobil Corp., the Federal Trade Commission staff apparently is finally close to signing off on the deal.
A source tells CNNfn that the staff is looking at an anticipated agreement that Exxon and Mobil divest about 15 percent of their gasoline stations to win approval for their $81 billion merger.
The agreement would require the companies to either sell stations they own or sever ties with independent stations carrying their brands. It would affect about 1,500 Mobil stations and more than 800 Exxon stations out of their combined total of 15,700.
The agreement was reported in an article in Tuesday's Wall Street Journal, which cited company documents and people familiar with the FTC talks. In addition to the station divestitures, the companies will have to sell a West Coast refinery and interests in several U.S. pipelines, the Journal said.
An agreement could come as soon as next week, according to CNNfn's source. FTC Chairman Robert Pitofsky has been very involved in these negotiations and it is assumed that the approval will not run into any roadblocks, according to the source.
Officials with both oil giants said they could not comment on details of the ongoing talks with the FTC. One source with Exxon would only confirm that the gist of the Journal story was accurate. But both companies stated on the record they expect a decision "soon."
"Our feeling on this is that based on our ongoing discussion with the commission, we expect the FTC to complete its review soon," said Tom Cirigliano, an Exxon spokesman. "It's taken some time, but we understood a merger of this scope would receive extensive review."
The deal got approval from the European regulatory authorities in September. The companies confirmed they were in talks the day after Thanksgiving last year. When it was announced Dec. 1, 1998, the Exxon-Mobil merger was the largest corporate marriage in history, although it has since been passed by the proposed MCI Worldcom Inc. purchase of Sprint Corp.
The FTC deal now in the works would require Exxon to leave the Northeast and Mobil to vacate the mid-Atlantic states, the Journal said, with Mobil's network taking the biggest hit.
Mobil (MOB) is expected to divest about 1,220 stations in Virginia, Maryland, Delaware, Pennsylvania, New Jersey and the District of Columbia and an additional 300 stations in Texas, the paper said.
Exxon (XON) is expected to divest about 520 stations in New York, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine, the paper said, along with a refinery.
Tosco Corp. and Chevron Corp. are said to be interested in buying the stations, the Journal said.
Both stocks were down 2 percent in trading Tuesday, with Exxon shares down 1-15/32 to 78-1/16 at the 4 p.m. close, while Mobil finished down 1-7/8 to 102.
 from staff and wire reports
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