|
Chevron, Phillips eye deal?
|
 |
September 10, 2000: 9:46 a.m. ET
Report: Oil firms negotiate $18B tie-up, building on chemicals pact
|
LONDON (CNNfn) - Oil company Chevron Corp. is reportedly discussing a deal to purchase U.S. counterpart Phillips Petroleum Corp. for about $18.3 billion, building on the merger of their chemicals units this summer.
A deal, which would create a company with a market value of nearly £55 billion ($78 billion), could emerge by the end of the year, the Sunday Times of London reported, citing people familiar with the companies. A merger would combine Chevron, the fourth-largest U.S. oil company, with No. 7 Phillips.
The paper said Chevron (CHV: Research, Estimates) would pay more than $70 per share for Phillips (P: Research, Estimates). On the New York Stock Exchange Friday, shares of Phillips closed down 81 cents at $61.94 and Chevron fell $1.62 to close at $86.69.
In June, the two companies rolled their chemicals businesses into a joint venture known as Chevron Phillips Chemical Co., which has about $6 billion in assets.
Kenneth Derr, Chevron's chief executive officer, views a merger with Phillips as a way for his company to stave off takeover, the Times said. Derr was said to mull a deal for Phillips for about the last year, and now that the chemicals pact has been struck he is looking to expand their ties.
Chevron led abortive merger talks with Texaco last year. A deal for the smaller Phillips is seen as likely to go over more smoothly, an analyst told the paper.
A wave of consolidation struck the oil industry more than a year ago, largely as companies sought ways to become more efficient amid low oil prices. BP Amoco bought Atlantic Richfield, while industry leader Exxon purchased Mobil. France's Total Fina also purchased compatriot Elf Acquitaine.
Derr's interest in Phillips was sparked by the low oil prices, the Times reported. Since then, however, crude oil prices have soared and are now hovering around 10-year highs. 
|
|
|
|
|
|
Chevron
Phillips
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
