WASHINGTON -- The federal government is on the verge of announcing a settlement of its large antitrust case that has blocked BP Amoco PLC from completing the $30 billion acquisition of Atlantic Richfield Co., according to people involved in the case.
The Federal Trade Commission met in a closed-session hearing yesterday afternoon to consider a recommendation from the staff to settle the case after the companies agreed to sell one of the crown jewels of the deal -- ARCO's large oil and natural gas holdings in Alaska -- to Phillips Petroleum Co. for about $7 billion.
By the end of the meeting, the agency was described as being close to announcing a resolution of the case, people involved in it said. They said the delay was necessary to enable the companies and the agency to complete work on what was described as relatively minor aspects of the settlement.
The agency is expected to file a final consent decree with a U.S. District Court soon, permitting completion of a deal that would reshape the landscape for oil production in Alaska and elsewhere.
The proposed acquisition of ARCO by BP Amoco was announced a year ago and drew immediate skepticism from antitrust officials because of the enormous consolidation in the oil industry. In the months leading up to the deal, Exxon announced its intent to buy Mobil; BP had acquired Amoco; and Texaco entered into a marketing venture with Shell. The proposed acquisition of ARCO would make BP Amoco the world's third-largest oil company behind the Royal Dutch/Shell Group and Exxon Mobil.
After 10 months of review, the FTC filed a lawsuit in February to block the acquisition on the grounds that it was anti-competitive and violated the Clayton Antitrust Act. When the commission's lawyers filed for an injunction to block the deal from being completed, it became the largest corporate acquisition to be challenged by the federal government.
Officials said the proposed acquisition could lead to significant increases in the price of crude oil for refiners in West Coast states, where prices at the gas pump far exceed the national average.
BP Amoco and ARCO control about 70 percent of oil production in Alaska, although under a pact with the state, the companies agreed to reduce their control to about 55 percent. By shedding ARCO's Alaska assets once the deal is completed, BP Amoco would continue to control about 40 percent of Alaska production.
