The state of Alaska has required Exxon to divest Mobil's 3 percent share of the trans-Alaska pipeline system in order to resolve the state's competitive concerns regarding the merger of the two companies, Alaska Attorney Bruce Botelho said today. The $73.7 billion merger was first announced Dec. 1, 1998.
Exxon Corp. and Mobil Corp. confirmed today that the U.S. Federal Trade Commission has completed its review of the proposed merger and approved a consent order for the merger of the two companies, terms of which have been accepted by the companies.
Exhaustive FTC review
Exxon Chairman Lee Raymond said in a statement, "The FTC's decision, coupled with the European Commission's approval gained earlier, cleared the way for the merger to proceed. Exxon and Mobil moved quickly to close the transaction and to launch the world's premier petroleum and petrochemical company, which will be known as Exxon Mobil Corp."
Exxon Mobil Corp. is incorporated in New Jersey.
The companies called the FTC review "one of the most thorough and exhaustive ever undertaken, lasting some 11 months."
State concerns around pipeline
"Exxon and Mobil both own shares in TAPS and this divestiture will ensure that the merger of the two companies does not stifle pipeline competition," Botelho said. "Without divestiture, the merger would have increased Exxonís share of the pipeline and eliminated a competitor that has lowered its rate for transporting petroleum on the pipeline several times in the past year. Without this remedy, small producers on the North Slope would have lost much of the benefits of competition on TAPS that has recently emerged."
Alaska conducted extensive investigations and negotiations in cooperation with the FTC and other states to ensure that the merger does not have an anti-competitive effect. The state of Alaska filed its lawsuit and proposed consent decree today in the U.S. District Court in Anchorage, jointly with the states of California, Oregon and Washington. Exxon and Mobil have already agreed to the terms and, if approved by the court, the consent decree will resolve the suit.
The Consent Decree requires Exxon to sell Mobilís 3.0845 percent share of the pipeline within nine months of the filing date. If the sale is not made within that time period, a trustee will be appointed to complete the divestiture.