Word: socal
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Dates: during 1980-1989
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Experts also downplay any major consequences of oil mergers on America's dependence on the Organization of Petroleum Exporting Countries. Says Walter Levy, a leading oil consultant: "OPEC in general benefits from larger markets for its oil. To the extent that Socal-Gulf and other mergers tend to erode the impetus for domestic exploration, OPEC will benefit-but only marginally...
...merger of Socal and Gulf is not expected to receive any strong Government opposition on antitrust grounds. Said Energy Secretary Donald Hodel last week: "Politically, it's a tough issue because it is a natural reaction to say, 'My gosh, these giants are merging and there must be something bad about that.' But I don't see that it has any significant effect from an energy standpoint...
Despite the prominence and publicity given to Big Oil, the U.S. petroleum industry as a whole remains remarkably diverse. The four largest refiners (Socal, Exxon, Shell and Standard Oil of Indiana) control only about 29% of the market. By comparison, the four top companies in the typical manufacturing industry control an average of 40%. Says a top Federal Trade Commission official: "We could conceivably stop the merger, but it would take the clearest sort of signal from Congress before it would happen...
...another big oil takeover. Flush with then" recent successes, Pickens and the Bass brothers might go after other companies. Arco, having been spurned in its bid for Gulf, may also start shopping. To be sure, there is not likely to be another combine of the size of the Gulf-Socal deal. But as long as the price of oil shares remains cheap compared with exploration costs, merger fever in the oil industry will be far from burned out. -By Alexander L. Taylor III. Reported by Richard Woodbury/San Francisco and Adam Zagorin/New York
...everyone's winners list was Corporate Raider T. Boone Pickens Jr. and his partners. Together with Pickens' Texas-based Mesa Petroleum, they acquired 13.2% of Gulf stock at an average price of $45 a share, and now stand to reap $760 million from Socal's takeover for $80 a share. Mesa alone will rake in $506 million...