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Judge rejects request to block Phillips-Conoco merger
by The Associated Press
A federal judge Aug. 22 rejected an international moving company’s request that he temporarily block Phillips Petroleum Co.’s proposed acquisition of fellow oil giant Conoco Inc.
Even a short delay of the $35 billion merger would do more harm to Phillips and Conoco in lost cost savings and future planning than it would save Transeuro Amertrans, U.S. District Judge Sven Erik Holmes ruled.
Holmes also said London-based Transeuro, which buys gasoline from and has a service contract with the companies, failed to show it would be harmed by the merger and likely couldn’t win its antitrust lawsuit.
The merger is expected to be completed by the end of September.
Transeuro sued April 30 in U.S. District Court in Tulsa alleging the merger, which would create the nation’s third largest oil company, would raise gasoline prices and stifle competition in the consolidating oil industry.
The company filed for a temporary restraining order Aug. 20 after it claims to have learned that the Federal Trade Commission would approve the acquisition the week of Aug. 19.
The FTC is expected to require the companies to sell gasoline stations in the West and refineries before approving the deal. Both Phillips and Conoco have moved to meet those demands.
Transeuro attorney Joseph Alioto argued that imminent federal approval warranted the temporary block because otherwise the companies would implement the merger and a judge could never separate them.
Will be world’s sixth largest oil company ConocoPhillips, which would have its headquarters in Houston, would be the world’s sixth largest oil company and the nation’s leading gasoline retailer. The combined firm would control 13 percent of the nation’s refining capacity, officials said.
Alioto argued that ConocoPhillips will be able to raise prices at its retail outlets and that reduced competition in an already consolidated industry would make price collusion easier.
“This is a major industry with direct affect on the economy,” Alioto said. “Certainly everybody who buys gasoline is going to be hurt.”
But Phillips and Conoco attorneys countered that the combined company will still lack the market share to control prices and that federal regulators consider the oil industry sufficiently competitive.
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