FTC: Merger Won't Affect Prices
WASHINGTON -- The Federal Trade Commission (FTC) said customers are unlikely to see changes in gas prices or brand names resulting from the $15.1 billion merger of Phillips Petroleum Co. and Conoco Inc. following its approval of deal.
The companies completed the merger creating the third-largest U.S. oil and gas company only hours after receiving approval from the FTC. Antitrust regulators cleared the merger with conditions intended to maintain competition in the energy market and keep prices from rising, the Associated Press reported.
Fadel Gheit, an energy analyst with Fahnestock & Co., said the deal shouldn't affect consumers or prices at the pump. "It was a step that was necessary for both companies. They could not have survived single,'' he told the AP. "Bigger is better in the business where you don't know where oil prices are going to be a year from now."
The FTC voted 5-0 for the deal, but required the companies to sell refineries and gasoline stations in Utah and Colorado and certain operations in Missouri, Illinois, New Mexico, Texas and Washington. The agency did not require sales in other regions because the deal was unlikely to raise gasoline prices in the rest of the country, the report said.
The companies announced their intentions to merge in November and base the new company, ConocoPhillips, in Houston. The company is now the world's sixth-largest oil and gas concern, and third largest in the United States, behind Exxon Mobil Corp. and ChevronTexaco Corp.
ConocoPhillips also is the country's top refiner and a retailing giant, with about a 17,000-store network of convenience stores and gas stations nationwide, the report said.
ConocoPhillips Chairman Archie Dunham told reporters that consumers would not see changes in the familiar brand names. "We'll take advantage of the Conoco brand where it's the strongest brand. We'll use the Phillips brand where it's the strongest," he said.
Anticipating the FTC conditions, the companies already had begun selling some facilities. Phillips, based in Bartlesville, Okla., is selling its Woods Cross refinery near Salt Lake City and 25 filling stations in Utah and southern Wyoming. Houston-based Conoco is unloading its 60,000-barrel-a-day refinery in Commerce City, Colo., the report said.
The FTC also is requiring Phillips to sell gas stations in eastern Colorado; a propane and butane storage plant in Spokane, Wash.; and propane facilities in Jefferson City, Mo., and East St. Louis, Ill. Conoco must sell certain natural gas wells in New Mexico and Texas.
The FTC had said the original merger proposal would have reduced competition, allowing ConocoPhillips to raise prices. Conoco sells gasoline, diesel fuel and other petroleum products at 5,000 outlets in the United States, while Phillips retails at more than 12,000 stations under such brands as Phillips 66, Circle K and 76.
Shareholders approved the deal in March. Phillips shareholders got one share of ConocoPhillips stock for each Phillips share they own, while Conoco shareholders got .4677 shares of the new stock for each of their shares. That means Phillips shareholders have a 57 percent stake in the new company and Conoco shareholders own 43 percent.
ABOVE: (From right) Archie Dunham, chairman of ConocoPhillips, and Jim Mulva, president and chief executive officer, raised the new corporate flag shortly after the merger of Conoco Inc. and Phillips Petroleum Co. was completed.
The companies completed the merger creating the third-largest U.S. oil and gas company only hours after receiving approval from the FTC. Antitrust regulators cleared the merger with conditions intended to maintain competition in the energy market and keep prices from rising, the Associated Press reported.
Fadel Gheit, an energy analyst with Fahnestock & Co., said the deal shouldn't affect consumers or prices at the pump. "It was a step that was necessary for both companies. They could not have survived single,'' he told the AP. "Bigger is better in the business where you don't know where oil prices are going to be a year from now."
The FTC voted 5-0 for the deal, but required the companies to sell refineries and gasoline stations in Utah and Colorado and certain operations in Missouri, Illinois, New Mexico, Texas and Washington. The agency did not require sales in other regions because the deal was unlikely to raise gasoline prices in the rest of the country, the report said.
The companies announced their intentions to merge in November and base the new company, ConocoPhillips, in Houston. The company is now the world's sixth-largest oil and gas concern, and third largest in the United States, behind Exxon Mobil Corp. and ChevronTexaco Corp.
ConocoPhillips also is the country's top refiner and a retailing giant, with about a 17,000-store network of convenience stores and gas stations nationwide, the report said.
ConocoPhillips Chairman Archie Dunham told reporters that consumers would not see changes in the familiar brand names. "We'll take advantage of the Conoco brand where it's the strongest brand. We'll use the Phillips brand where it's the strongest," he said.
Anticipating the FTC conditions, the companies already had begun selling some facilities. Phillips, based in Bartlesville, Okla., is selling its Woods Cross refinery near Salt Lake City and 25 filling stations in Utah and southern Wyoming. Houston-based Conoco is unloading its 60,000-barrel-a-day refinery in Commerce City, Colo., the report said.
The FTC also is requiring Phillips to sell gas stations in eastern Colorado; a propane and butane storage plant in Spokane, Wash.; and propane facilities in Jefferson City, Mo., and East St. Louis, Ill. Conoco must sell certain natural gas wells in New Mexico and Texas.
The FTC had said the original merger proposal would have reduced competition, allowing ConocoPhillips to raise prices. Conoco sells gasoline, diesel fuel and other petroleum products at 5,000 outlets in the United States, while Phillips retails at more than 12,000 stations under such brands as Phillips 66, Circle K and 76.
Shareholders approved the deal in March. Phillips shareholders got one share of ConocoPhillips stock for each Phillips share they own, while Conoco shareholders got .4677 shares of the new stock for each of their shares. That means Phillips shareholders have a 57 percent stake in the new company and Conoco shareholders own 43 percent.
ABOVE: (From right) Archie Dunham, chairman of ConocoPhillips, and Jim Mulva, president and chief executive officer, raised the new corporate flag shortly after the merger of Conoco Inc. and Phillips Petroleum Co. was completed.