Word: socal
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Dates: during 1980-1989
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...this direct and dramatic way was concluded the biggest corporate takeover in U.S. history. Its elements of cold calculation, high risk and individual daring made the move seem entirely characteristic of the oil industry, which has always rewarded the nervy gambler. Socal now stands to become the third-largest American oil company; its combined revenues of $57.3 billion would place it behind only Exxon (1983 revenues: $94.6 billion) and Mobil (1983 revenues: $58.5 billion), A completed deal would also make Socal the largest U.S. gasoline retailer, with 10.2% of the market and stations in every state but Wisconsin and North...
...Socal immediately said that it would sell many of Gulfs refineries and service stations after it acquired them to keep antitrust considerations from stopping the merger. Still, nervous investors were worried that the deal might fall apart or be stopped by the Government; Gulf shares dropped instead of rising toward the $80 takeover price. The stock closed the week...
...Gulf-Socal merger goes through, it will be the climax of a run of takeovers that has been reshaping the oil industry. In the past 32 months five large oil firms (Gulf, Getty Oil, Conoco, Marathon Oil and Cities Service) have been swallowed up. Last week's news set off renewed speculation about which energy companies would be acquired next. Among the most frequently mentioned targets: Superior Oil, Kerr-McGee and Amerada Hess...
...having bought Gulfs oil, will Socal do less exploring on its own? Since it is spending $13.2 billion on Gulf, critics argue, it is not going to have much left over for drilling. Ed Rothschild, assistant director of the Citizen/Labor Energy Coalition, maintains that the reduced competition resulting from the merger will encourage Socal to explore less and charge more for its oil. Says he: "The losers in this deal are the U.S. economy, competition in the domestic oil and gas industry and the consumer...
...economists and industry experts. They contend that there is no reason why the combination of Gulf and Socal should not continue to do nearly as much exploration as the two were doing separately. In addition, they note that if the stock value of oil companies continues to go up, the resulting higher value for reserves swill encourage more drilling. Even the effect on crude prices will be slight. Economist Alan Greenspan of the Townsend-Greenspan consulting firm observes, "These mergers are, in the world scheme, not terribly relevant. Even if they were, it is a competitive market, and no matter...