Bp/Amoco Merger Acquisition

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BP Amoco/Arco Merger|
Merger and Acquisitions Term Paper|
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12/10/2012|

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Contents
Time Line of Events3
Introduction4
Industry Analysis5
Overview of ARCO's Business7
Overview of BP Amoco’s Business7
Value Creation from the Merger:8
Competitors Analysis9
Antitrust Issues11
FTC Arguments12
What Happened?14
Divestitures14
Phillips Acquires ARCO Alaska15
FTC dissent16
Performance and key Financials17
Annual Shareholder’s meeting:19
Conclusion:20

Time Line of Events
April 01, 1999: Merger confirmed by BP & ARCO. Deal valued at $26.8 bill. 400 layoffs expected in AK (2000 worldwide); Gov. announces formation of task force consisting of Attorney General Bruce Botelho, Department of Revenue Commissioner Wilson Condon, and DNR Commissioner John Shively.| |

April 12, 1999: Open letter from BP Exploration Alaska and ARCO Alaska executives promising: * BP will invest $5 bill in North Slope development over next 5 yrs; * BP will increase financial support to community organizations by 50% over BP's & Arco's current level; * BP will make Alaska the centerpiece of its global gas activities to commercialize North Slope gas; * BP will honor all current agreements with ARCO's contractors & suppliers; * Organized labor will play important part in slope construction activities; * BP will work cooperatively & collaboratively w/ all levels of government; * BP will continue its efforts to provide jobs & business opportunities for Alaskans whenever possible; * BP will be composed of equal numbers of BP & Arco employees. April 16, 1999: Legislature forms Joint Special Committee on Mergers to analyze merger. The Committee is chaired by Senator Rick Halford (R-Chugiak)| |

June 11, 1999: Merger committee hosts meeting for status report to the Legislature and the public from Bruce Botelho, BP and ARCO and takes public testimony.June 24, 1999: Senator Pearce travels to Washington D.C., meets with the FTC. She also testifies in front of the Senate Energy and Natural Resources Committee.June 25, 1999: In a letter drafted by counsel retained to study merger, Merger Committee issues first written request to the Administration to prepare and provide a detailed analysis of the revenue impacts that the Administration anticipates will occur as a result of the merger.July 29, 1999: Merger Committee hosts FTC Director of Competition William Baer to educate the public on the process in the FTC. Economist Gus Fliakos discusses economic impacts and Bill Britt, DNR, discusses pipeline issues. Public testimony is taken.| |

November 1, 1999: Saying it has substantially complied with antitrust reporting requirements, BP triggers 20-day deadline rule for completing the merger. Governor Knowles issues a press release threatening to oppose the merger. BP waives the 20-day rule.Nov. 5, 1999: Governor announces he has reached acquisition agreement w/ BP "Charter for Development of the Alaska North Slope."| |

Dec. 2, 1999: Knowles Press Release: State and BP sign revised merger agreement. New agreement provides legally enforceable environmental provisions and new production & divestiture provisions.| |

Jan. 24, 2000: The Legislature's panel of merger analysts, consisting of economists, attorneys and industry experts, issued their final report concluding that the Amended Charter Agreement did not require BP to divest a sufficient portion of ARCO's assets to provide for competition by a vertically integrated company that is the functional equivalent of ARCO in its ability to participate in the same level of competition in all phases of operations.| |

February 11, 2000: Administration receives heavy criticism by Legislature and media for seeking payment of its legal costs from BP Amoco. In a story printed in the Anchorage Daily News, Bob King acknowledges that the state had collected $1.5 million from BP and plans to ask...
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