Conoco-Phillips Merger Set

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Conoco-Phillips Merger Set

03/12/2002
HOUSTON -- Shareholders of Conoco Inc. and Phillips Petroleum Co. approved the companies' proposed $15.6-billion merger by more than a 96-percent margin in separate shareholders' meetings. The votes came a week after the European Union signed off on the deal. Canada also has approved it.

The U.S. Federal Trade Commission has requested more information before it decides on the merger, which would form the nation's third-largest oil corporation.

Both companies are hopeful the merger will proceed in the second half of 2002. The new company, ConocoPhillips, would assume Conoco's home in Houston, leaving in limbo the 2,400 Phillips employees in its hometown of Bartlesville, Okla.

Only Exxon Mobil Corp. and ChevronTexaco Corp. would be larger than ConocoPhillips in the United States, and it would be the sixth-largest investor-owned oil company worldwide.

The company would control or have stakes in 19 refineries worldwide with a capacity of 2.6 million barrels a day. It would be the United States' top refiner and would be behind a network of 17,000 U.S. convenience stores, under brands such as Conoco, Circle K and 76.

Joint oil reserves of the new supermajor would be about 8.7 billion barrels. The companies estimate the deal will save them $750 million annually once redundancies and an undetermined number of workers are cut, the Associated Press reported.

Though both companies describe the deal as a merger of equals, Phillips shareholders will own 56.6 percent of ConocoPhillips, with Conoco shareholders coming away with 43.4 percent. Phillips chairman and CEO James J. Mulva would be president and CEO of the combined company. His officers will be a mix of current Phillips and Conoco executives.

Conoco chairman Archie W. Dunham is delaying his retirement to serve as chairman of the new company until he steps down in 2004, when Mulva will add that role. Each company would supply the new board with eight directors, the report said.