|
EU to probe BP Amoco-Arco tie
|
 |
June 11, 1999: 7:30 a.m. ET
European regulators add $26B oil merger to growing scrutiny list
|
LONDON (CNNfn) - The European Commission has launched a probe into BP Amoco's proposed $26 billion buyout of U.S.-based Atlantic Richfield, citing concern that combined the two oil companies may concentrate too many resources in too few hands.
Thursday's surprise move came just a day after Europe's chief regulatory watchdog said it had similar concerns with Exxon's planned $83 billion marriage with Mobil, a union that would strengthen the combined company's position as a paramount force in the global oil industry.
In a statement released after the close of trading in New York Thursday, the EC said "it will make a detailed assessment of the impact of the transaction on competition conditions in exploration, development, and production of crude oil."
The EC said it was conducting its probes in conjunction with its U.S. counterpart, the Federal Trade Commission. It must render a decision by mid-October.
The latest probe initially took observers in Europe off guard, since Atlantic Richfield has a relatively thin presence on the Continent.
Yet regulators are said to be concerned that a combined BP Amoco-Arco may have an unfair advantage in North Sea gas. After a merger, analysts estimate, BP Amoco (BPA) would end up owning about 75 percent of the proven reserves in Alaska's North Slope oil fields, where Arco (ARC) has its greatest concentration of proven reserves.
Another apparent fear is that the combination could hurt competition in onshore production and distribution of low calorific gas in the Netherlands and Germany, the Financial Times reported.
When BP Amoco unveiled its merger plans with Arco in early April, it marked the second major deal for the company in 12 months, following BP's $48 billion acquisition of Amoco completed last December.
BP Amoco investors largely shrugged off the news Friday. The company's stock was up 1.3 percent at 1,154 pence in London. Atlantic Richfield shares ended up 1-9/16 at 84-7/8 in New York Thursday. 
--from staff and wire reports
|
|
|
|
|
|
Arco
BP Amoco
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
