Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Monday, July 6, 1998 Published at 13:38 GMT 14:38 UK

Business: The Company File

Shell and Texaco 'merger talks'

Shares in Shell have risen following the speculation

Anglo-Dutch oil company Shell and US rival Texaco are discussing a merger of their petrol station chains in Europe according to newspaper reports.

[ image: A deal with Texaco could help Shell fight off the threat from supermarket petrol stations]
A deal with Texaco could help Shell fight off the threat from supermarket petrol stations
Negotiations between the two companies are reported to have been going on for several months.

Shell is said to have hired surveyors to determine a fair value for Texaco's assets, which could be worth up to 1bn.

Spokesmen for Shell and Texaco declined to comment on the newspaper speculation.

But a spokesman for Texaco said: "We would look into anything that increased the company's value for our shareholders."

Any potential deal would create Britain's largest petrol retailer, with up to 21% of the market.

[ image: Shell could link up with its US rival]
Shell could link up with its US rival
It could involve Shell buying Texaco's operations outright or the two could pool their assets in a joint venture in which Texaco would maintain a stake of 20-25%.

The latter deal would be similar to one struck by BP and Mobil two years ago.

It created Britain's second largest petrol station chain behind Esso, pushing Shell down into third place.

Retail Expert Richard Perks talking on BBC's Working Lunch: 'The petrol companies are not strong retailers yet'
The Petrol Retailers Association (PRA), which represents thousands of petrol station owners across the UK said it was "concerned" about a possible link-up between the two oil giant. It pointed out that some of both companies' stations are independently owned and will face closure in areas where both Shell and Texaco operate.

PRA's director Ray Holloway said there were "bound to be closures where there is overlap between the two companies. That will be bad news for people running those stations," he said. "There will also be restriction of choice for the consumer," he added.

Fighting the supermarkets

A merger between Shell and Texaco would give them the power to compete with major supermarkets, including Sainsbury's and Tesco, whose petrol price wars have cornered a quarter of the market.

Tesco recently revealed plans to operate more than 100 new petrol stations to compete with rival oil companies.

When the London Stock Exchange opened on Monday shares in Shell were up 5 to 430.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage |

The Company File Contents

Internet Links



The BBC is not responsible for the content of external internet sites.

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles