OIL INDUSTRY: COMMISSION CLEARS BP/AMOCO MERGER.

Summary: The European Commission has cleared the merger between British Petroleum Company (BP) and Amoco Corporation strengthening the two oil and petrochemicals heavyweights' position on the world market. BP Amoco, which is expected to start trading in its new form on January 1, will be the third largest oil company in the world (collectively creating a group worth USD110 billion), behind Exxon-Mobil and Royal Dutch/Shell. The Commission cleared the deal declaring that the only area of the merger that had caused concern was that of its combined strength in polyisobutylene (PIB), which has now been weakened through the sale of Amoco's European PIB unit.

The deal is a full legal merger between the two companies and will be brought about by Amoco merging with a newly-formed subsidiary of BP, incorporated under US laws, under the terms of an Agreement and Plan of Merger entered into among BP, Amoco and the new subsidiary. On completion of the deal, BP's shareholders will hold approximately 60% and Amoco's 40% of the combined entity's share capital. Following an announced general meeting held in the second week of...