Exxon-Mobil Merger Talks Complicate BP-Amoco Megadeal

Strategic Insights -

BP's proposed $30 billion acquisition of Amoco, announced in August, is facing new complications due to talks between Exxon and Mobil to form the world's largest oil company. The potential merger could impact the oil market and competition in the petroleum products market, prompting US regulators to reconsider approval of both deals. An Exxon-Mobil tie-up would reunite parts of John D Rockefeller's once-mighty Standard Oil empire, which was split in 1911 by US anti-monopoly action.

Key Takeaways:

  • The Exxon-Mobil merger talks could frustrate BP's plans to complete its $30 billion acquisition of Amoco by the end of the year.
  • US regulators might consider the overall impact of both deals on the oil market before giving clearance for either to go ahead.
  • An Exxon-Mobil tie-up would reunite parts of John D Rockefeller's once-mighty Standard Oil empire, which was split in 1911 by US anti-monopoly action.
  • The merger could lead to annual savings exceeding $2 billion, but Mobil's slim company structure may make it harder to realise these savings.
  • The US Federal Trade Commission would likely look at the competition in the petroleum products market if both deals were to go ahead as proposed.
  • The proposed deal may also face opposition from US Congress due to concerns about job losses and revenue impacts.
  • BP-Amoco aims to achieve $2 billion in annual savings through its megadeal, but this may be challenging to achieve due to Mobil's slim company structure.
  • Exxon, trading as Esso, has an extensive chain of filling stations and is the market leader in petrol sales in many European countries.

Statistics:

  • $30 billion: Proposed value of BP's acquisition of Amoco.
  • $2 billion: Potential annual savings for BP-Amoco through its megadeal.
  • $2 bilion (€1.2 billion): Potential annual savings for Exxon and Mobil through their merger.
  • 1911: Year in which John D Rockefeller's Standard Oil empire was split by US anti-monopoly action.
  • 1980s: Decade in which BP bought Rockefeller's original Standard Oil of Ohio.

Sources:

  • Dow Jones news agency
  • US Federal Trade Commission
  • Supreme court ruling (1911)
  • Standard Oil of Ohio
  • Exxon
  • Mobil
  • BP
  • Amoco