Company of the week
Sunday 16 August 1998
Investors applauded the BP/Amoco transaction, bidding up shares of both companies on a day when stock markets around the world sank. BP shares rose nearly 10 per cent on the week. Shareholders of Chicago-based Amoco will get 3.97 of BP's London-traded shares, in the form of American depositary receipts, for each Amoco share. BP expects to complete the buyout by the end of the year.
Cost-cutting after the merger will add $2bn a year to annual earnings by 2000. Combined, the companies made $5.2bn in 1997. BP said 6,000 jobs will be "affected" worldwide, including 1,000 firings in Cleveland, where BP has its US refining and marketing operations. The companies employ 100,000 people worldwide.
The purchase will strengthen BP in petrochemicals, US refining and North American natural gas, making the company less susceptible to oil price swings. Amoco, though it has some of the largest natural gas reserves in North America, has been frustrated in its attempts to find oil and needs BP's international reserves to meet future demand.
Amoco "has lacked focus", said Vince Francom, an analyst with Safeco Asset Management. "In 1995, they mention how they're going to concentrate on refining in Eastern Europe. In 1996, they said we're selling all of that. They seem to be all over the place."
Regulators in both the US and UK will give the acquisition close scrutiny, antitrust lawyers said. "There will be pipeline issues, refinery issues and retail store issues," said Steve Newborn, a Washington antitrust lawyer.
- 1 Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
- 3 A pint of water every day is the key to losing weight, scientists say
- 4 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
Nazi gold train: 'Significant' discovery made in Poland
Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Carol Vorderman reveals she is 'covered in burns' after she fell off her treadmill while running naked
TTIP controversy: The European Commission and Big Tobacco accused of cover-up after heavily redacted documents released
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...
£20400 per annum: Ashdown Group: An established and highly reputable organisat...