Federal regulators approve Chevron acquisition of Texaco
Associated Press WriterWASHINGTON (AP) -- Oil giant Chevron Corp. received the go-ahead from federal regulators to proceed with its acquisition of fellow industry titan Texaco Inc. to make the nation's second-largest oil company, the government announced Friday.
The Federal Trade Commission voted 4-0 to approve the merger. Chairman Timothy J. Muris recused himself from the vote.
San Francisco-based Chevron agreed to buy Texaco in October 2000 in a deal the FTC said is now worth about $45 billion. Under the terms of the deal, Chevron will be renamed ChevronTexaco Corp. and will trade on the New York Stock Exchange under the new ticker symbol CVX.
No. 3 Chevron had $48 billion in revenue last year. No. 2 White Plains, N.Y.-based Texaco posted revenue of $51 billion last year.
The combined company will still lag far behind the so-called "super" majors -- Exxon Mobil Corp., Royal Dutch/Shell Group and BP Amoco PLC, which have muscled up through huge mergers in recent years.
The deal requires a number of significant divestitures.
European regulators have already granted approval.
The companies announced in a statement they have also negotiated a consent decree with the attorneys general of 12 states.
"Today marks a critically important milestone as we move to establish a premier energy company with the world-class assets, talent, financial strength and technology to achieve superior results," said Chevron Chairman and CEO David J. O'Reilly, who will lead the new company in the same capacity.
Texaco Chairman and CEO Glenn F. Tilton said the companies will compy wtih all the conditions of the consent order with the FTC. Tilton, along with Richard H. Matzke, vice chairman of Chevron, will serve as vice chairman of ChevronTexaco.
Chevron plans to take control of Texaco Oct. 9, the same day the two companies' shareholders are to vote on the deal.
Holders of Texaco stock will recieve 0.77 shares of ChevronTexaco for each share of Texaco they own. Chevron also will assume roughly $8 billion in debt.