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Tuesday, 30 November, 1999, 22:48 GMT
$82bn oil merger cleared
Oil rig There has been a stream of oil company mergers

The $82bn merger of oil giants Exxon and Mobil has been approved - with a list of conditions - by the US government.

The decision clears the way for the creation of the largest publicly traded oil company in the world.

The link-up is the latest in a series of oil company mergers in the past year.

To get the backing of the Federal Trade Commission(FTC), the new company agreed to sell 2,431 petrol stations, some pipeline interests, the Benicia refinery near San Francisco and other assets.

FTC Chairman Robert Pitofsky said these had been demanded to make sure there remained sufficient competition at petrol pumps in the US. "We're comfortable that the deal as restructured will not create competitive problems or consumer harm," he said.

Ten year concession

Exxon Chairman Lee Raymond said in a statement that the merger created "the world's premier petroleum and petrochemical company, which will be known as Exxon Mobil Corp."

The new firm - which includes the Esso brand - has nine months to complete most of its sales.

If it fails the commission can appoint a trustee to sell a far broader package of assets.

The FTC said that one or at most two operators can take over the Exxon and Mobil petrol stations on the East Coast.

Owners and operators may use the names "Exxon" and "Mobil," and accept their credit cards, for up to 10 years.

"We are gaining confidence that litigation will not be necessary," said Jim Daskal, counsel to the National Coalition of Petroleum Retailers.

The group had met with Mr Pitofsky to express their concerns during negotiations.

Among the measures agreed, Exxon is prohibited from using the Exxon name to sell diesel and gasoline for up to 12 years in California.

The firms must also divest interests in one of two southeastern pipelines and Mobil must divest its interest in the trans-Alaska pipeline.

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See also:
31 Mar 99 |  The Company File
Oil merger fever
01 Apr 99 |  The Economy
Lubricating the oil industry
11 Jun 99 |  The Company File
EU launches oil competition probe

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