Chevron,Texaco closer to merger

The Associated Press
Tuesday August 14, 2001

NEW YORK — Chevron Corp. and Texaco Inc. have signed a consent order with the Federal Trade Commission, outlining the terms they expect to meet in order to gain regulatory approval for their merger. 

In a filing made with the Securities and Exchange Commission on Friday, the two companies also said their shareholders would vote on the merger on Oct. 9 – by which time they hope to have received regulatory clearance for the deal. 

Texaco, based in White Plains, N.Y., said it anticipates divesting its U.S. refining and marketing affiliates, certain natural gas processing and transportation facilities and some of its jet fuel marketing businesses. 

“However, we cannot assure (shareholders) that the FTC will accept the terms of the consent order agreement, or that it will not seek to impose other conditions or otherwise challenge the merger,” the company said in its filing. Texaco spokesman Paul Weeditz would not say whether the company had found buyers for any of these assets. 

Texaco refines crude oil in the United States under two separate affiliates, Equilon Enterprises and Motiva Enterprises. 

Texaco owns a 44 percent interest in Equilon, with the rest belonging to Shell Oil Co. Texaco and Shell each own one-third of Motiva; the rest is owned by Star Enterprises, a joint venture between Texaco and the Saudi Refining Co.  

“Texaco has been negotiating with Shell and Saudi Refining concerning a possible purchase of Texaco’s interests in Equilon and Motiva. However, no agreement has been reached,” the company said in its filing. 


Shell and Texaco reportedly have been wrangling over a price. 

San Francisco-based Chevron agreed to buy Texaco in October 2000 in a deal now worth about $38 billion. Under the terms of the deal, Chevron will be renamed ChevronTexaco Corp. Holders of Texaco stock will receive 0.77 shares of ChevronTexaco for each share of Texaco they own. 

European regulators have already granted their approval. 

On Monday, shares of Texaco were down 24 cents to $69.40 on the New York Stock Exchange, while Chevron’s shares fell 6 cents to $91.69.