Shell and Texaco in Talks to Create Largest Petrol Retail Chain in the UK

Shell is reportedly in advanced negotiations with Texaco for a deal that could create the largest petrol retail chain in the UK, surpassing Esso. The joint venture or buyout would see Shell, currently third-largest in the market, move into the top spot, potentially leading to thousands of job losses. The talks have been ongoing for several months, with Shell surveyors assessing the value of Texaco assets.

Key Takeaways:

• Shell is currently the third-largest petrol retailer in the UK, with around 16% of the market, while Texaco is in fourth place.
• A deal between Shell and Texaco would overtake Esso as the largest petrol retail chain in the UK.
• The Texaco petrol station sites have been seen as a potential target for aggressive expansion by Tesco since 1994.
• Shell has declared its ambition to be number one or number two in all markets it operates in, suggesting discontent with its current third-place ranking.
• Any deal would raise concerns about the fate of small, independent petrol stations, which have been hit by the price war between oil companies and supermarkets.
• The closure of Shell Haven refinery in Essex would reduce overcapacity in the UK refinery sector and make a merger or joint venture between Shell and Texaco more viable.
• The deal could involve a clean-up bill of tens of millions of pounds if Shell goes through with plans to close Shell Haven.

Statistics:

• Shell currently holds around 16% of the UK petrol retail market.
• The UK petrol retail market has been transformed by the entry of supermarkets such as Tesco and the joint venture between Mobil and BP.
• The Mobil and BP joint venture created the second-largest chain in the UK two years ago.
• The Texaco petrol station sites are valued at an unspecified amount, but are thought to be attractive to Shell.

Sources:

• The Times, 1998: "Shell and Texaco in Talks to Create Largest Petrol Retail Chain in the UK" (no specific date given, but copyright 1998)