Conoco and Phillips Petroleum announced their boards of directors have approved a merger of equals that will create the third-largest US energy company.
In a statement, the two firms said the new company, tentatively valued at $35 billion in assets, will be named ConocoPhillips. The two firms expect the deal to be completed by the second half of 2002.
Worldwide, the company will be the sixth-largest energy company based on hydrocarbon reserves and the fifth-largest global refiner.
Under the deal, Phillips shareholders will receive one share of new ConocoPhillips common stock for each share of Phillips they own. Conoco shareholders will receive 0.4677 shares of the new company for each Conoco share.
Phillips shareholders will own about 56.6 per cent of the new company, and Conoco shareholders will own 43.4 per cent.
The companies estimated annual cost savings of at least $750 million in the first full year after the merger.
After the merger is completed, Conoco chairman and chief executive Mr Archie Dunham will serve as chairman of the new company and will delay his scheduled retirement until 2004.
Phillips chairman and chief executive Mr James Mulva will be president and chief executive and will become chairman upon Dunham's retirement.
AFP