E.U. Approves Chevron Texaco Merger
European Union competition authorities gave a nod of approval on March 1st to a proposed merger between Chevron Corp. and Texaco Inc., setting the stage for U.S. antitrust regulators to make a similar move.
The U.S. Federal Trade Commission (FTC) has been weighing the merger announced on October 16th, but is not expected to reach a decision anytime soon.
The European Commission (E.C.) said that the impact of the merger, which would create the world’s fourth-largest oil company, would be fairly small in Europe.
The E.C. released a report on the merger, saying that: “The number of areas where the companies’ activities overlap in Europe are limited and where they do, the combined market shares remain below 15 percent.”
The statement concluded that: “The Commission has decided not to oppose this operation and to declare it compatible with the common market.”
However, the approval process in the U.S. will not progress as smoothly because the companies have considerably larger operations in the U.S. Talks with the federal regulators have focused primarily on the companies’ downstream operations, and Texaco will likely have to shed its stakes in two refining and marketing joint ventures.
Royal Dutch/Shell has indicated that it is in discussions with Texaco to buy its stake in Equilon Enterprises, which has assets on the west coast.
Shell and Saudi Aramco will likely become 50-50 partners in Motiva Enterprises, with operations on the east and gulf coasts, also as a condition of the merger.
© 2001 Mena Report (www.menareport.com)