Valero Expected FTC Queries
Valero Energy Corp. said its proposed $4 billion purchase of rival Ultramar Diamond Shamrock is on track despite a Federal Trade Commission request for more information about the deal.
Valero company spokeswoman Mary Rose Brown said the FTC request was expected and the company still plans to close the deal by the end of October. "I think they're just doing their due diligence," she told the Associated Press. "Nobody from our side was surprised. They were all expecting a second round of questions.''
Valero Energy agreed in early May to buy Ultramar for $4 billion in cash and stock in a deal that would create the nation's second-largest oil refiner. The combination of San Antonio-based refiners would create a company with $32 billion in annual sales, 23,000 employees, 5,000 service stations and 13 refineries.
Valero's proposed purchase requires approval of federal and state regulators. In previous oil industry mergers, including Exxon-Mobil and BP-Amoco, regulators have required companies to sell off assets to avoid being too powerful in particular markets, the report said.
Valero benefited from that process last year, when it bought a former Exxon refinery in California that regulators forced the company to sell. Now that refinery will come under regulatory scrutiny because Valero would pick up two other refineries in California by buying Ultramar.
Valero chief executive Bill Greehey has insisted that the deal would lead to production of more inexpensive gasoline being produced in California.
"We're still confident we won't have to divest any assets," Brown said. "The assets are so complementary. The only area anyone has expressed any concerns about was California, and when you realize what a horse of a different color we are, it becomes apparent this is a good deal."
Valero company spokeswoman Mary Rose Brown said the FTC request was expected and the company still plans to close the deal by the end of October. "I think they're just doing their due diligence," she told the Associated Press. "Nobody from our side was surprised. They were all expecting a second round of questions.''
Valero Energy agreed in early May to buy Ultramar for $4 billion in cash and stock in a deal that would create the nation's second-largest oil refiner. The combination of San Antonio-based refiners would create a company with $32 billion in annual sales, 23,000 employees, 5,000 service stations and 13 refineries.
Valero's proposed purchase requires approval of federal and state regulators. In previous oil industry mergers, including Exxon-Mobil and BP-Amoco, regulators have required companies to sell off assets to avoid being too powerful in particular markets, the report said.
Valero benefited from that process last year, when it bought a former Exxon refinery in California that regulators forced the company to sell. Now that refinery will come under regulatory scrutiny because Valero would pick up two other refineries in California by buying Ultramar.
Valero chief executive Bill Greehey has insisted that the deal would lead to production of more inexpensive gasoline being produced in California.
"We're still confident we won't have to divest any assets," Brown said. "The assets are so complementary. The only area anyone has expressed any concerns about was California, and when you realize what a horse of a different color we are, it becomes apparent this is a good deal."