The Federal Trade Commission (FTC) on Friday approved ChevronTexaco Corp.'s acquisition of Unocal Corp. after a long-running FTC complaint against Unocal was resolved under two consent agreements. ChevronTexaco announced in April it would buy Unocal for $16 billion in a cash and stock deal, plus assume nearly $2 billion in debt (see NGI, April 11).

The FTC announced two settlements concerning antitrust charges concerning Unocal's patents for reformulated gasoline. Unocal agreed to stop enforcing the relevant reformulated gasoline patents, and it said it will make the patents public by the time the merger closes, the FTC said in a statement. The FTC stated that a key element of the settlement is ChevronTexaco's agreement not to enforce patents of a Unocal subsidiary that could have increased gasoline prices in California by over half a billion dollars a year, or almost 6 cents a gallon.

The FTC's complaint alleged that Unocal subsidiary Union Oil illegally acquired monopoly power in the technology market for producing low-emission gasoline mandated by the state of California. According to the complaint, Union Oil misrepresented to the California Air Resources Board (CARB) that certain gasoline research was nonproprietary and in the public domain, while simultaneously pursuing a patent that would enable it to charge substantial royalties if CARB used the research results in developing regulations.

Despite the FTC approval, there were rumors last week that China National Offshore Oil Corp. (CNOOC) was still considering whether to make a bid for Unocal. CNOOC said earlier in the week that it "is continuing to examine its options with respect to Unocal. These options include a possible offer by the company for Unocal, but no decision has been made in this respect." CNOOC added, "No assurances can be made that the company will ultimately make an offer for Unocal." It has hired investment bank Rothschild to help in its decision.

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