Shell buys Pennzoil-Quaker State
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09-27-2002, 11:08 PM
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Shell buys Pennzoil-Quaker State
I thought this edited story might have some information of interest to the oil heads here..
Maybe there IS a little oil swapping going on between the majors!
Regardless of the brand on the bottle, we're not too far off from the day where it all comes out of the same tank, eh?
Story courtesy of Bloomberg.com 9/27/02.
Washington, Sept. 27 (Bloomberg) -- Royal Dutch/Shell Group won approval from antitrust regulators to buy Pennzoil-Quaker State Co. for $2.9 billion, giving the biggest U.S. gasoline retailer the country's two top-selling brands of motor oil.
To win approval, Shell, the world's No. 3 investor-owned oil company, agreed to sell Pennzoil-Quaker State's half interest in a Louisiana refinery it operates with ConocoPhillips, the U.S. Federal Trade Commission said. That will protect competition for refining base oil, used to make motor oil, the agency said.
The combination gives Shell 35 percent of the world's largest lubricants market. The company will also get Pennzoil's 2,100 Jiffy Lube oil-change stations. Shell expects to complete the transaction on Oct. 1, spokesman Rick Wirth said.
The transaction also gives Shell about 12 percent of the world market for lubricants, about the same as larger rival Exxon Mobil, said independent energy analyst Stephen Smith.
Job Cuts
Shell said it expects to save $140 million a year by 2004 from the acquisition, in part by cutting 1,230 jobs, or 15 percent of the workforce. Pennzoil has 7,400 employees and Shell has about 800 in its lubricants unit, Wirth said.
Pennzoil-Quaker State and ConocoPhillips have used half of the production from the 23,000-barrel-a-day refinery for their own products and sell the rest to competitors. The refinery began operating in 1997.
Shell Oil, the Houston-based unit of Royal Dutch/Shell Group, already produces base oil at two refineries in Texas, including one at Port Arthur operated by Motiva Enterprises LLC, a joint venture of Shell Oil and Saudi Aramco.
The FTC said that Shell and Pennzoil control 39 percent of North American production of the type of base oil used to make motor oil. The agency also barred Shell from increasing the amount of base oil Pennzoil purchases from Exxon Mobil under a 10-year supply contract the agency mandated when it approved Exxon's acquisition of Mobil in 1999.
Brand Control
Shell can complete the acquisition before it loses the right to continue marketing the Havoline motor oil brand, obtained when the FTC approved the formation of ChevronTexaco Corp. Shell obtained the right to market Texaco's Havoline brand when the FTC last year forced Texaco Inc. to sell its motor-oil ventures as a condition for its acquisition by Chevron. The Havoline brand will revert to ChevronTexaco next year.
Maybe there IS a little oil swapping going on between the majors!
Regardless of the brand on the bottle, we're not too far off from the day where it all comes out of the same tank, eh?
Story courtesy of Bloomberg.com 9/27/02.
Washington, Sept. 27 (Bloomberg) -- Royal Dutch/Shell Group won approval from antitrust regulators to buy Pennzoil-Quaker State Co. for $2.9 billion, giving the biggest U.S. gasoline retailer the country's two top-selling brands of motor oil.
To win approval, Shell, the world's No. 3 investor-owned oil company, agreed to sell Pennzoil-Quaker State's half interest in a Louisiana refinery it operates with ConocoPhillips, the U.S. Federal Trade Commission said. That will protect competition for refining base oil, used to make motor oil, the agency said.
The combination gives Shell 35 percent of the world's largest lubricants market. The company will also get Pennzoil's 2,100 Jiffy Lube oil-change stations. Shell expects to complete the transaction on Oct. 1, spokesman Rick Wirth said.
The transaction also gives Shell about 12 percent of the world market for lubricants, about the same as larger rival Exxon Mobil, said independent energy analyst Stephen Smith.
Job Cuts
Shell said it expects to save $140 million a year by 2004 from the acquisition, in part by cutting 1,230 jobs, or 15 percent of the workforce. Pennzoil has 7,400 employees and Shell has about 800 in its lubricants unit, Wirth said.
Pennzoil-Quaker State and ConocoPhillips have used half of the production from the 23,000-barrel-a-day refinery for their own products and sell the rest to competitors. The refinery began operating in 1997.
Shell Oil, the Houston-based unit of Royal Dutch/Shell Group, already produces base oil at two refineries in Texas, including one at Port Arthur operated by Motiva Enterprises LLC, a joint venture of Shell Oil and Saudi Aramco.
The FTC said that Shell and Pennzoil control 39 percent of North American production of the type of base oil used to make motor oil. The agency also barred Shell from increasing the amount of base oil Pennzoil purchases from Exxon Mobil under a 10-year supply contract the agency mandated when it approved Exxon's acquisition of Mobil in 1999.
Brand Control
Shell can complete the acquisition before it loses the right to continue marketing the Havoline motor oil brand, obtained when the FTC approved the formation of ChevronTexaco Corp. Shell obtained the right to market Texaco's Havoline brand when the FTC last year forced Texaco Inc. to sell its motor-oil ventures as a condition for its acquisition by Chevron. The Havoline brand will revert to ChevronTexaco next year.
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