Shell in $1.5bn Exxon link-up
Thursday 11 July 1996
Hopes that the announcement heralded a move to unlock shareholder value by demerging the chemicals division sent Shell's shares up 18.5p at one stage in morning trading. However, the shares ended just 5.5p up at 943p as disenchantment set in once analysts scrutinised the deal. John Toalster of brokers Societe Generale Strauss Turnbull said: "It's a bit of a storm in a tea cup.... It represents around 5 per cent of turnover, but it is not going to be earth shattering as far as Shell is concerned."
Additives are used in petrol and lubricants to make engines run more smoothly and more cleanly. Shell said the joint venture would combine the capabilities of each partner and provide "significant" enhancements in efficiencies in research and development, technical services, marketing and distribution. The move was prompted in part by sluggish demand for lubricants and fuels, which is falling below economic growth rates, the oil group said.
It has signed a non-binding letter of intent with Exxon to form the joint venture, which will be controlled on a 50:50 basis by the two companies. Exxon Chemicals will contribute its Paramins division to the operation, while Shell International Chemicals will add its world-wide petroleum additives business. It is due to start operating next year, assuming it receives regulatory clearance.
The Exxon business employs 1,600 people in 13 countries, ranging from the Americas and continental Europe to the Middle and Far East, while Shell has 400, although that excludes workers at manufacturing sites in the UK, France, Belgium and the US. A spokesman for Shell said many of the factories were joint operations which could not be separated. He could give no commitment on whether or not there would be redundancies as a result.
- 1 Games of Thrones actor Lena Headey makes emotional promise to her unborn daughter
- 2 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 3 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
- 4 Female Muay Thai champion hustles coaches to give them a beating
- 5 Picture of couple posing with beached dolphin 'that later died' causes outrage
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Purity balls: Girls in the US making virginity pledges as fathers vow to 'protect purity'
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
Female Muay Thai champion hustles coaches to give them a beating
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
Report finds that Britain's wages are the most unequal in Europe
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...