Merger between British Petroleum and AMOCO Corporation

The two companies are international oil exploration, petroleum and petrochemical groups. Their three core activities are oil and gas exploration and production; refining marketing supply and transportation of oil and gas; and manufacturing and marketing of petrochemicals and related products. Both are also involved in the solar energy field. The AMOCO will merge with a newly-formed subsidiary of BP, incorporated under the laws of the United States.

According to the Commission, the overlaps are in the areas of crude oil and natural gas exploration and production, refining and marketing of oil and gas, and petrochemicals. In petrochemicals, the companies’ activities are complementary, with BP being involved in a broad range of products and AMOCO focusing on fewer products.

The only sector in which the Commission considered there was a threat to competition was in the market for the production of polyisobutylene (PIB). It appears that BP and AMOCO are the only two viable suppliers of PIB to industrial users in Europe. The Commission stated that the reduction in the number of suppliers would be likely to affect the cost structure of their final respective products.

The notifying parties modified their original merger plan by divesting AMOCO’s European PIB business in the industrial market in the EEA to a company that is a major distributor of chemicals in Europe. Since there is no overlap between BP and AMOCO the level of production in Europe, but rather the level of distribution, the transfer of that business is sufficient to remove competition problems raised by the merger. Therefore the Commission cleared the operation