WASHINGTON -- Acting within hours after government approval, Exxon and Mobil formally sealed their $81 billion merger today, creating the world's largest privately owned oil company.
The Federal Trade Commission approved Exxon's acquisition of Mobil after requiring that the new company sell more than 2,400 service stations, a refinery and other assets to ensure continued competition.
The new company, which will reunite two of the biggest entities left by the 1911 government breakup of John D. Rockefeller's Standard Oil empire, will be based in Irving, Texas.
Company officials immediately registered the new Exxon-Mobil in Delaware where Mobil was registered and New Jersey where Exxon was registered, formally creating the new oil giant, said a company spokesman.
"We have completed the merger," said Exxon-Mobil spokesman Robert Lanyon.
The Federal Trade Commission required as part of the deal that the two oil giants sell more than 2,400 service stations, mostly in the Northeast, California and Texas to ensure retail competition where the two companies have large, overlapping market shares.
Government approval had been expected and cleared the way for Exxon Corp., and Mobil Corp., who announced their intention to merger last December, to move swiftly to complete the acquisition.
The companies' boards of directors had approved the merger earlier, pending final government approval.
By mid-afternoon, the New York Stock Exchange, saying the merger was completed, said it would no longer use the Exxon or Mobil symbol. Beginning Wednesday, the company would be traded under its new Exxon-Mobil symbol of XOM.
Exxon Chairman Lee Raymond said in a statement that the two companies "have accepted terms and conditions specified by the FTC and will comply with them fully and in a timely manner." The new company will have nine months to sell 15 percent of its gas stations -- those stipulated by the FTC -- and a year to sell other assets including a California refinery.
"The merger will allow Exxon-Mobil to compete more effectively," said Raymond.
The four FTC commissioners, meeting behind closed doors, voted unanimously to approve the merger after a morning-long briefing in which the agency's staff outlined the divestiture requirements, said an agency spokesperson.
When Exxon, the country's largest oil producer, and Mobil, which is second largest, announced the merger a year ago, federal regulators and members of Congress, voiced concern about potential anti-competitive problems, especially in retail gasoline sales in some parts of the country.
To address those concerns, the two companies agreed to demands by the FTC that they sell off about 15 percent of their retail outlets -- or 2,413 service stations -- mostly in New England, the mid-Atlantic states, Texas and California -- where the two companies in some areas control 20 to 35 percent of retail market.
Exxon also will have to sell a refinery near Benicia, Calif., some petroleum terminal areas and pipeline assets, the FTC said.
Without such divestitures, the merger "would significantly injure competition" in the areas of retail sales and in oil refining in California, the FTC concluded.
"Because Exxon and Mobil are such large and powerful competitors ... the commission insisted on extensive restructuring (of the combined company) before accepting a proposed settlement," said FTC Chairman Robert Pitofsky. "This settlement should preserve competition and protect consumers from inappropriate and anticompetitive price increases."
There was no immediate comment from either Mobil or Exxon, both of which had been pressing the FTC hard in recent months over the extent of the divestitures required by the government to meet competition concerns.
Mobil and Exxon will have to sell 1,740 service stations in the New England and mid-Atlantic states as well as 319 in Texas and 360 in California. No specific buyers were required, and in many cases gasoline will still be marketed with Mobil or Exxon brand names.
While the FTC order reflects the most extensive divestitures in the agency's history, they still represents only a small portion of the two companies' nearly 16,000 gasoline stations and $138 billion in combined assets.
The two companies have said the merger was needed reduce costs and compete with the huge, low cost government-owned oil companies in Saudi Arabia, Iran, Mexico and Venezuela. Exxon and Mobil executives have said the merger will eliminate about 9,000 of the two companies' 120,000 jobs.
The Exxon-Mobil deal reflects a rush by the major oil companies toward consolidation.
A year ago, British Petroleum completed its merger with Amoco, and BP-Amoco's proposed $29 billion purchase of Atlantic Richfield is nearing approval at the FTC, although some competitive issues involve the two companies' Alaska holdings remained to be worked out. That deal would create the world's second largest non-government oil company behind Exxon-Mobil.
Texaco Inc., and Shell have combined some refinery and marketing operations. Earlier this year, Chevron and Texaco talked of a marriage, but those discussions between the country's third and fourth largest oil companies broke off over price.
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