Phillips expects synergies of $250 million/year from Tosco purchase

Phillips Petroleum Co. has closed on its acquisition of Tosco Corp. after the US Federal Trade Commission cleared the merger without divestiture requirements. Phillips said the merger will result in operating savings of $250 million in 2002.

Sept. 17, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Sept. 17 -- Phillips Petroleum Co. Monday closed on its acquisition of Tosco Corp., Greenwich, Conn., after the US Federal Trade Commission cleared the merger without requirements for divestitures.

Following the transaction, each share of Tosco common stock was converted into the right to receive 0.8 of a share of Phillips common.

Based on Sept. 10 closing prices, Tosco shareholders are receiving Phillips shares worth $7.3 billion, a 35.4% premium over the value of Tosco immediately preceding the announcement of the deal on Feb. 4.

Jim Mulva, Phillips' chairman and CEO, said, "We have combined two strong complementary companies into a significant refining and marketing competitor in the US."

He said the merger will result in operating savings of $250 million in 2002.

Michael Panatier will be CEO of Phillips' refining, marketing, and transportation business, Phillips 66 Co. He also will remain executive vice-president of Phillips Petroleum Co.

Tom O'Malley, chairman and CEO of Tosco, will be Phillips Petroleum Co. vice-chairman through Dec. 31. He also will be a director of Phillips Petroleum Co.

Phillips 66 now owns 10 US refinery systems with a combined capacity of 1.7 million b/d, along with a 75,000 b/d refinery in Ireland. The company will market through 12,400 branded outlets.

The company's refining headquarters are in Linden, NJ, and marketing in Tempe, Ariz.