1 December 1999
Exxon Corporation and Mobil Corporation confirmed that the US Federal Trade Commission (FTC) has approved a consent order for the $82 billion merger of the two companies. Exxon and Mobil have accepted terms and conditions specified by the FTC.
Exxon Chairman Lee Raymond said, "The FTC's decision, coupled with the European Commission's approval gained earlier, cleared the way for the merger to proceed. Exxon and Mobil moved quickly to close the transaction and to launch the world's premier petroleum and petrochemical company, which will be known as Exxon Mobil Corporation". Exxon Mobil Corporation is incorporated in the state of New Jersey.
FTC conditions Exxon Mobil will satisfy to complete the merger include:
- Exxon selling its fee and leased service stations from New York to Maine, and assigning its contracts with all dealers and distributors in those areas to a new supplier;
- Mobil selling its fee and leased service stations from New Jersey through Virginia, and assigning its contracts with all dealers and distributors in those areas to a new supplier. In addition Mobil selling its East Boston, Massachusetts, and Manassas, Virginia, terminals.
- Mobil selling its interest in TETCO, a Texas motor fuel distributor, selling its interests in 10 service stations in Dallas and Fort Worth, and assigning its contracts with distributors in five areas in Texas
- Dallas, Austin, San Antonio, Houston and Bryan-College Station;
- Exxon selling its Benicia, California, refinery; withdrawing from retail fuels marketing in four areas (Oakland, San Francisco, San Jose and Santa Rosa), and selling its remaining service stations and assigning its dealer and distributor contracts in the state;
- Exxon will divest its interest in 12 service stations and a product terminal in Guam;
- Mobil amending its base oil contract with Valero at the Paulsboro refinery in New Jersey;
- Exxon Mobil Corporation entering into long-term contracts to supply a total of 12,000 barrels-per-day of base oil from its Gulf Coast refineries to up to three customers;
- Exxon Mobil Corporation selling either Exxon's 48.8% interest in the Plantation pipeline or Mobil's 11.49% interest in the Colonial pipeline, and Mobil's 3.08% interest in the Trans-Alaska Pipeline System (TAPS); and
- Exxon selling its assets associated with its worldwide jet turbine lubricating oil business.
Exxon Mobil Corporation will have nine months to satisfy most of the FTC's conditions everywhere except California, where it will have twelve months to sell the Benicia Refinery and the California marketing assets. During that time, Exxon Mobil Corporation will hold various businesses separate from management and operation of the newly merged company.
Except for Exxon and Mobil operations that will be divested, the held separate businesses will become part of the ExxonMobil organization when FTC conditions related to these businesses are met. Revenues and earnings from businesses "held separate" will be consolidated in the Exxon Mobil Corporation financial statements.
The held separate businesses are:
- All of Mobil's fuels marketing operations from Maine through North Carolina, Florida, Georgia, Texas and Louisiana;
- Mobil's Torrance, California, refinery and California pipelines, as well as all of its fuels marketing operations in California, Arizona and Nevada;
- Mobil's Alaska Pipeline Company and Mobil's interest in Colonial Pipeline Company;
- Exxon's worldwide jet turbine lubricating oil assets.
Raymond estimated about 9,000 jobs, out of the total of 123,000 Exxon Mobil employees, will be eliminated. "We regret the uncertainties these divestments may cause to customers and employees. We are convinced, however, that the incentives for this merger remain strong," Raymond said.
Source: Exxon Mobil