Chevron/Texaco Merger Requires Sell-off | AccountingWEB

Chevron/Texaco Merger Requires Sell-off

The oil and energy industry was rocked with the news of the $100 billion merger between Chevron and Texaco.

However, if the merger actually were to go through, analysts predict that Texaco will have to sell off its partnership with the Royal Dutch/Shell Group in the western United States before the deal can be finalized.

Why? Chevron actually will acquire Texaco to form the new company, Chevron-Texaco, and as a result, the merger places the company in direct competition with the three largest oil companies in the world, including Exxon Mobil, BP Amoco and Royal Dutch/Shell Group.

With energy reserves and exploration a major focus of the presidential election, Chevron is banking on the fact that regulators will act kindly towards the company and grant the acquisition.

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