ARCO shareholders approved the company’s proposed $27 billioncombination with BP Amoco. The all-share deal will involve theexchange of 0.82 BP Amoco American Depository Shares (ADS) for eachARCO share. BP Amoco’s shareholder meeting to vote on thecombination is scheduled for Wednesday in London. The combinationremains subject to the approval of regulatory authorities,including the US Federal Trade Commission (FTC) and the EuropeanCommission. The companies currently are working to close thetransaction later in the year.

“BP Amoco’s scale and financial strength will significantlyenhance the value of ARCO’s assets and allow greater value to berealized than if ARCO remained an independent oil and gas company,”ARCO CEO Mike Bowlin told shareholders. “The new enterprise willhave a stronger strategic position, enhanced efficiencies and costcompetitiveness, and will generate significant growthopportunities.”

The deal was announced in April (see Daily GPI, April 5, 1999). Acquiring ARCO would makeBP Amoco the biggest non-state owned oil producer with a combinedmarket capitalization of about $190 billion. The merger is the outcomeof negotiations begun in January after ARCO management approached thecompany to consider options for closer co-operation.

Onshore in the United States and the Gulf of Mexico, Arco willadd 360,000 Boe to BP Amoco’s daily output – half of it gas,chiefly from ARCO’s 82% interest in Vastar, one of the mostprofitable operators in the Lower 48. ARCO’s proven gas reservestotal 9.8 Tcf, mainly in the Gulf of Mexico, the UK North Sea andthe South China Sea, but it holds un-booked gas volumes of afurther 15 Tcf, mainly in the Middle and Far East. In 1998 itproduced 2.1 Bcf of gas, mainly from the Gulf of Mexico, the UKNorth Sea and Indonesia.

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