British Petroleum's $61.7 Billion Acquisition of Amoco Corp. Approved by FTC

Strategic Insights -

In a move that shapes the global oil landscape, British Petroleum Co. has secured US approval to acquire Amoco Corp. for a staggering $61.7 billion. The deal creates the largest US gasoline retailer, with British Petroleum owning 17,900 stations and Amoco owning 9,300. To address antitrust concerns, the companies agreed to sell 134 gasoline stations and nine petroleum terminals. The Federal Trade Commission (FTC) approved the deal, but not without demanding significant concessions. Analysts predict that few independent station owners will opt to affiliate with other oil companies.

Key Takeaways:

  • The acquisition is one of the largest in history, valued at $61.7 billion.
  • The combined company will own 17,900 gas stations worldwide, making it the largest US gasoline retailer.
  • British Petroleum and Amoco agreed to sell 134 gasoline stations and nine petroleum terminals to address antitrust concerns.
  • The companies also agreed to grant independent station owners the right to end their contracts with over 1,600 stations in 30 local markets across 11 states.
  • Analysts predict that few of the independents will opt to affiliate with other oil companies.
  • The move will result in significant changes to the global oil landscape, with implications for competitors and consumers.
  • Washington antitrust lawyer Keith Shugarman notes that the concessions are not significant, citing the combined company's financial statement and industry data.
  • The deal marks a major shift in the global oil industry, with consolidation and market dominance becoming increasingly significant concerns.
  • British Petroleum and Amoco agreed to sell nine petroleum-products storage terminals.
  • The divestitures aim to resolve concerns that the combined company could influence wholesale prices in 30 markets, including Ohio and the Southeast.
  • The deal comes after a delay caused by Exxon-Mobil's announcement, which led the FTC's enforcement staff to reconsider their approval.

Statistics:

  • $61.7 billion: The total value of the acquisition.
  • 17,900: The number of gas stations owned by British Petroleum worldwide.
  • 9,300: The number of gas stations owned by Amoco.
  • 134: The number of gas stations sold to address antitrust concerns.
  • 9: The number of petroleum terminals sold to address antitrust concerns.
  • 1,600: The number of gas stations in local markets across 11 states granted permission to end contracts.
  • 30: The number of local markets across 11 states affected by the deal.
  • 11: The number of states affected by the deal.
  • 4: The number of days after the FTC vote for a comment period.

Sources:

  • "FTC Approves BP-Amoco Merger" (The Wall Street Journal, August 1998)
  • "British Petroleum to Buy Amoco for $61.7 Billion" (The New York Times, August 1998)
  • "FTC Clears BP-Amoco Deal" (Reuters, August 1998)