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Hope for BP-Arco deal
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February 25, 2000: 9:55 a.m. ET
Green light flickers for BP Amoco takeover if Alaskan assets sold
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LONDON (CNNfn) - U.K.-based oil producer BP Amoco may sell all of Atlantic Richfield Co.'s Alaskan assets to secure U.S. antitrust enforcers' consent for its acquisition of the Californian oil company, prompting speculation the takeover might win eleventh-hour approval, according to a report published Friday.
BP Amoco's move aims to bypass an appearance in court with the Federal Trade Commission. The FTC voted Feb. 2 to file a lawsuit seeking to block BP Amoco's $30 billion purchase of Arco. The Commission has however been meeting with BP Amoco and Arco officials since last week and is reviewing four prospective buyers for Arco's assets in Alaska, lawyers familiar with the discussions told newspaper U.S.A. Today.
The FTC planned to base its argument in court on the impact a combined BP-Arco would have on competition in oil exploration and production on the Alaskan North Slope crude oil and in marketing the oil to West Coast refineries.
The oil companies had offered to divest about half of Arco's Alaskan assets,
but FTC officials thought that insufficient. Without the concessions, the two firms would control about 55 percent of Alaska's production, down from 70 percent before a deal reached with Alaskan state regulators.
Concentration of ownership in Alaska could lead to higher U.S. retail gas prices, particularly on the Pacific Coast. About 45 percent of oil refined in California and elsewhere on the West Coast comes from Alaska.
According to the newspaper, lawyers close to the negotiations say FTC chairman Robert Pitofsky is likely to continue to oppose any proposed settlement but might fail to win his colleagues' support.
Major concessions, like those now being considered, are expected to convince at least three of the five commissioners that the deal should go through, the newspaper report. Some antitrust experts think a last-minute settlement is likely, particularly given BP Amoco's apparent willingness to divest Arco's Alaskan assets. 
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BP Amoco
Arco
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