EU okays Chevron Texaco merger

The pending merger of Chevron Corporation and Texaco Inc. will create the world's fourth largest oil and gas production company, but because their combined European market share is only 15% and the number of areas where the companies' activities overlap in Europe are limited, the European Commission has approved the merger.

Chevron has concentrated its operations outside the European Economic Area, which comprises the 15 members of the European Union, Iceland, Lichtenstein, and Norway. It sold most of its European downstream business to Texaco in 1984, with the rest going to Shell and Petroplus in 1997 and 1998 respectively.

Chevron does maintain a 20-30% market share in lubricant additives through its subsitiary Oronite, while Texaco holds a 5-10% share in the downstream finished lubricants market.

Because market shares are small, the merged Chevron-Texaco would not gain a significant position in the market, in the EU Commission's view, since the lubricant additives market currently has four equally strong players: Ethyl, Infineum, Lubrizol, and Oronite. As a consequence, the Commission voted not to oppose the merger and has declared it compatible with the European Union market and EEA Agreement.

Source: Secretariat, European Union