Efficiency, of course, means layoffs. BP Amoco has already cut 10,000 jobs since that merger; ailing Arco has announced 1,200 cuts since October alone. Arco is reportedly asking a sizable 20 percent premium over its $21 billion market value, and if the deal gets past negotiators, government regulators and a planned stockholder vote this week, more oilmen are sure to join their former colleagues in the unemployment line. The investment bankers, at least, are getting plenty of work these days.
Gas Guzzling Continues With BP-Arco Merger
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LONDON: Another day, another oil merger. British Petroleum is at it again: in talks to buy Los Angeles-based Atlantic Richfield Co. in an estimated $25 billion deal, just months after swallowing Amoco for $57.6 billion in December. Why the sudden craving for company? For the same reason that Exxon and Mobil -- not to mention Total and Petrofina -- teamed up in December: Oil is cheap and business is lousy these days, and the industry's behemoths are eager to create efficiencies of scale by scooping up their rivals. The proposed BP-Arco deal, in particular, would consolidate the two companies' operations in Alaska. Combined, the two would own more than 70 percent of the trans-Alaska pipeline.