Series Title | European Voice |
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Series Details | 26/11/98, Volume 4, Number 43 |
Publication Date | 26/11/1998 |
Content Type | News |
Date: 26/11/1998 By EUROPEAN Commission anti-trust regulators are expected to give their blessing to the creation of the world's third largest oil company next month with only the thinnest of strings attached. Industry sources say Competition Commissioner Karel van Miert will clear the 45-billion-ecu take-over of US oil giant Amoco Corporation by British Petroleum, imposing only minor conditions for an until-now hidden niche in the petrochemicals market. “There is no doubt that the deal should go through now,” said a national official following the inquiry. “The two companies are basically complementary and don't overlap activities too much in Europe.” Although the size of the BP/Amoco deal - with combined annual sales of close to 100 billion ecu - is unparalleled, the Commission's ruling will be closely watched by other players in the industry. The sector is going through a spate of mergers as the oil price falls to a 25-year low and chemicals margins are squeezed. The latest rumours centre on Belgian oil company Petrofina, which is said to be in the sights of French oil firm Elf Aquitaine. Under EU anti-trust rules, the Commission has a month after such deals are notified to clear them or begin an in-depth investigation, which could last for up to four months. Last week, Van Miert said he did not believe the merger would lead to excessive market power in the companies' core businesses - oil and gas exploration, refining and marketing. Indeed, as one industry official remarked: “The sector is consolidating and that means bigger companies should be actually welcomed because only they will be able to take on the huge businesses already out there.” The companies notified the EU's merger task force about the deal in September, but had to refile it late last month after the Commission asked for extra information regarding the combined company's activities in the market for polyisobutylene, an additive used to make fuel oils and lubricants. Amoco is the world's largest manufacturer of the related product, polybutene. Officials were concerned that BP/Amoco's combined market share in this market in the European Economic Area would be close to 40&percent;; well above the 30&percent; benchmark which sets alarm bells ringing among anti-trust regulators. However, they chose not to extend their first-phase inquiry by two weeks, as they were entitled to if they felt the companies were failing to address their concerns. Sources said the Commission could demand that some polyisobutylene-making facilities be divested or insist on an agreement to license some areas of manufacture to competitors. |
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Subject Categories | Energy, Internal Markets |
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