Global Business Consolidation Accelerates Amid Industry Challenges

Strategic Insights -

The past six months have witnessed eight major mergers in the oil and gas industry, as companies like BP Amoco and Atlantic Richfield Co. engage in negotiations. BP Amoco may pay up to $25 billion in stock for Atlantic Richfield, while Computer Associates acquires Platinum Technology International in a $3.5 billion cash deal. Meanwhile, the oil industry struggles with falling oil prices, which dropped by a third last year.

Key Takeaways:

  • BP Amoco and Atlantic Richfield Co. are negotiating a merger, potentially worth up to $25 billion in stock.
  • The oil industry has seen eight major mergers in the past six months, with the latest being BP Amoco and Atlantic Richfield Co.
  • Computer Associates acquires Platinum Technology International in a $3.5 billion cash deal, gaining access to Platinum's consulting services and software.
  • New home sales declined 2 percent in February, marking the third consecutive drop since hitting a record high last fall.
  • The February sales rate of 881,000 new homes is a five-month low, but still considered strong.
  • Microsoft Corp. is reorganizing its business, focusing on customer groups and needs rather than products and technology.
  • Amazon.com Inc. is launching an auction service and purchasing a 50 percent stake in Pets.com, an online pet store.
  • Ford's best-selling car, the Taurus, is getting a major facelift for the 2000 model year, shedding its oval styling cues for a cleaner look.

Statistics:

  • New home sales declined 2 percent in February, with a seasonally adjusted annual rate of 881,000.
  • The February sales rate was down from 899,000 in January, but still considered strong.
  • Sales for the first two months of this year are running 1.4 percent ahead of the same period in 1998.
  • BP Amoco may pay up to $25 billion in stock for Atlantic Richfield Co.
  • Computer Associates is acquiring Platinum Technology International in a $3.5 billion cash deal.
  • Amazon.com's customer database has grown to 8 million.
  • Shares of Platinum shot up 144 percent after the merger was announced, rising $14.18 3/4 to $24.06 1/4 on the Nasdaq stock market.

Sources:

  • BP Amoco PLC, exact stock value not specified (March 21).
  • Computer Associates, "Computer Associates acquires Platinum Technology International in $3.5 billion cash deal" (March 22).
  • Commerce Department, "New Home Sales," seasonally adjusted annual rate 881,000 (March 23).
  • Microsoft Corp., "Microsoft reorganizes business, focusing on customer groups and needs" (March 22).
  • Amazon.com Inc., "Amazon.com to launch auction service, purchase 50% stake in Pets.com" (March 23).
  • Ford Motor Company, "New Ford Taurus design unveiled" (March 24).