BP Amoco and ExxonMobil Dissolve Joint Venture

Strategic Insights -

BP Amoco and ExxonMobil have agreed to dissolve their European fuels and lubricants joint venture in response to the European Commission's authorization of the Exxon and Mobil merger. Under the agreement, BP Amoco will purchase Mobil's 30% interest in the fuels business for approximately $1.5 billion. The companies will also divide the assets of the lubricants business in line with their equity stakes.

The joint venture operated approximately 8,500 service stations across Europe, representing around 12% of the market, while the lubricants part of the venture had a market share of over 18% in Europe. BP Amoco will receive the service stations and other marketing assets, as well as the fuels refineries at Grangemouth, Coryton, Lavera, Nerefco, and Castellon. ExxonMobil will receive the fuels refinery at Gravenchon.

Key Takeaways:

  • BP Amoco will purchase Mobil's 30% interest in the European fuels business for approximately $1.5 billion.
  • The companies will divide the assets of the lubricants business in line with their equity stakes, with BP Amoco receiving 51% and ExxonMobil receiving 49%.
  • BP Amoco will retain the base oil refinery in Neuhof, Germany, and the lubricants leg of Coryton, while ExxonMobil will retain the Dunkirk refinery in France and the lubricants leg at Gravenchon.
  • The companies have agreed on the principles for the marketing of lubricants in Europe, with BP Amoco receiving the Mobil brand for an interim period in certain markets.
  • The termination of the joint venture is expected to have a minimal impact on staffing levels, with all necessary approvals expected to be received by January 1, 2000.
  • The economic effective date for the implementation of the final agreement is January 1, 2000.
  • BP Amoco will receive a shareholding in four refineries, including the Turkish Mersin, French Reichstett, and German Bayernoil refineries.
  • ExxonMobil will receive the fuels refinery at Gravenchon and a 10 lubricant blending plants.

Statistics:

  • 8,500 service stations across Europe, representing around 12% of the market, were operated by the joint venture.
  • The lubricants part of the venture had a market share of over 18% in Europe.
  • Approximately $1.5 billion will be spent on the purchase of Mobil's interest in the European fuels business.
  • 30% of the European fuels business is being purchased by BP Amoco.
  • 12% of the European fuels market is represented by the joint venture's service stations.

Sources:

  • M2 PressWIRE, December 7, 1999, "BP Amoco: BP Amoco buys ExxonMobil fuels business in Europe"