EU vets Exxon-Mobil
Sunday 30 May 1999
The Brussels investigation is likely to concentrate on the two firms' links with other oil companies and their natural gas activities in Germany and the Netherlands, a senior Commission source said.
Together, the two companies would create the world's biggest publicly traded oil company. Both firms' shareholders overwhelmingly approved the deal at separate meetings last Thursday.
Under EU competition regulations, all mergers and acquisitions over a certain size are subject to an initial probe. But only when EU anti- trust officials believe there could be serious competition concerns does Brussels launch a full-scale investigation.
The investigation can take up to four months to complete, and EU regulators can impose conditions on the two companies such as forcing them to sell assets or even block the deal if they fear a merger would create a dominant player in any one market.
Exxon and Mobil announced the acquisition on 1 December when oil prices were at a historical low. They originally said the deal would close in the middle of this year. The inquiry by Brussels means the merger may now take until October to complete. US regulatory authorities will also need to give their stamp of approval before the deal can go ahead.
EU Competition Commission Karel Van Miert said recently the two regulators will work closely on the Exxon-Mobil merger.
Since the deal was announced, oil prices have risen by more than a third. Lee Raymond, Exxon's chairman and chief executive, said the merger still made sense because of the savings it would produce for both companies.
Exxon estimates it will make cost savings of around $2.8bn as a result of the merger and the companies plan to cut 9,000 jobs from their combined workforce of 120,000.
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