British Petroleum and Amoco Unveil Plans for World's Largest Industrial Merger

British Petroleum and Amoco's proposed merger will create the largest industrial merger in history, resulting in a company worth $A185 billion, with the new entity set to become the third largest oil company in the world. The combined company will have a significant presence in the global petrochemicals market, with a strong strategic and geographical presence. The merger aims to increase pre-tax profits by at least $A3.4 billion by 2000 and promises significant cost savings through staff cuts and operational rationalization.

Key Takeaways:

• The merger between British Petroleum and Amoco will create the world's largest industrial merger, worth $A185 billion.
• The new company, BP Amoco plc, will hold a 60% stake, while Amoco will hold a 40% stake.
• The merger will result in significant cost savings of $A3.4 billion from staff cuts, improved procurement, and operational rationalization.
• The combined company will have about 14.8 billion barrels of oil and gas.
• The merger aims to increase combined pre-tax profits by at least $A3.4 billion by 2000.
• The new company will be led by BP Chief Executive Sir John Browne.
• The deal will be financed through the issue of new BP shares on the New York market in the form of American Depositary Receipts.

Statistics:

• $A185 billion: the worth of the new company, BP Amoco plc.
• 60%: the percentage stake held by British Petroleum in the new company.
• 40%: the percentage stake held by Amoco in the new company.
• $A3.4 billion: the expected cost savings from staff cuts, improved procurement, and operational rationalization.
• $A3.4 billion: the projected increase in combined pre-tax profits by the end of 2000.
• 14.8 billion barrels: the total oil and gas reserves of the combined company.

Sources:

• AFP