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Shell, Texaco end talks
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November 30, 1998: 11:08 a.m. ET
Companies buck oil industry trend, decide against European venture
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LONDON (CNNfn) - Shell and Texaco have bucked the current trend in the oil industry and decided against combining some of their operations.
In September, the companies announced they were in talks aimed at combining their European downstream activities, which include refining and marketing.
But Monday, the companies revealed that negotiations had ended and that "the proposed plan would not maximize shareholder value at both companies."
"Short term this is disappointing," admitted analyst Peter Hitchens at Williams de Broe, "but Shell (SHEL) reckons there's more mileage in going it alone."
The two groups have an existing agreement in the U.S. including Saudi Aramco. They stressed this alliance would continue unaffected.
Texaco (TX) senior vice-president Glenn F. Tilton said in a statement that the company would "continue to operate as a successful marketer and refiner in Europe."
The original announcement of a European tie-up gave rise to vague hopes that the companies might end up as closer bedfellows in the manner of British Petroleum (LSE:BP) and Amoco (AN).
The trend in the oil sector has been toward closer cooperation between the major groups, highlighted by last week's announcement of merger talks between Mobil and Exxon, and rumors Monday of more tie-ups in continental Europe involving Total [PSE:PFP] and Petrofina.
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