2002/8/30
ConocoPhillips Merger Completed
ConocoPhillips has completed the merger of Conoco Inc. and
Phillips Petroleum Company, following clearance by the U.S.
Federal Trade Commission earlier today. Shareholders of both
companies and all U.S. and foreign regulatory authorities cleared
the merger earlier this year.
ConocoPhillips is the third-largest integrated U.S. energy
company. On a global basis, it is the sixth largest publicly held
energy company based on hydrocarbon reserves and production, and
it is the fifth-largest global refiner.
ConocoPhillips has net proved reserves of 8.7 billion barrels of
oil equivalent (BOE), daily oil and natural gas production of 1.7
million BOE, and a refining capacity of 2.6 million barrels per
day, and has assets of $75 billion.
"Today marks the creation of a new international integrated
major energy company, with the assets, talent, financial strength
and technology needed to achieve superior results for all
stakeholders," said Jim Mulva, president and chief executive
officer of ConocoPhillips. "We possess a diversified global
portfolio of legacy assets and growth projects, as well as a
commitment to financial discipline and operating excellence.
Delivering on our portfolio of organic opportunities, together
with highgrading our investments and capturing synergies, will
provide a high-quality earnings base that will drive shareholder
value."
Each share of Phillips common stock has been converted into one
share of ConocoPhillips common stock, and each share of Conoco
common stock has been converted into 0.4677 of a share of
ConocoPhillips common stock.
Information regarding exchange of share certificates will be sent
to former Phillips and Conoco shareholders as soon as
practicable. Beginning September 3, ConocoPhillips' stock will be
listed on the New York Stock Exchange under the symbol
"COP".
"ConocoPhillips combines two successful energy industry
pioneers into a global energy company that is focused on
providing safe, clean and sustainable energy for the world and
exceptional value for our shareholders," said Archie W.
Dunham, chairman of the board of ConocoPhillips. "With
skilled and dedicated employees, a strong balance sheet, upstream
investment opportunities, and greater operational efficiency,
ConocoPhillips is a tough new major competitor in the
international petroleum industry."
ConocoPhillips is a major international integrated energy company
with operations in some 49 countries. Headquartered in Houston,
the company has assets of $75 billion, net proved reserves of 8.7
billion barrels of oil equivalent (BOE), and daily production of
1.7 million BOE.
2002/3/12
Phillips Shareholders Approve Merger with Conoco
The shareholders of Phillips Petroleum Company [NYSE:P] voted to
approve the proposed merger of equals with Conoco [NYSE:COC]
during a special meeting held here today.
The merger was approved by a significant majority of all shares,
with an overwhelming amount of shares voted. Based on preliminary
results, out of the 328 million shares voted, approximately 97
percent were voted in favor of the merger. The merger is expected
to be completed in the second half of this year, pending
expiration of the waiting period under the U.S. Hart-Scott-Rodino
Act and other customary closing conditions.
“Today’s vote is an important step in combining
Phillips and Conoco, and we appreciate the support from our
shareholders,” said Jim
Mulva, chairman and chief executive officer. “We believe the combination of these two
companies will create significant value for all stakeholders and
provide excellent financial and operational growth opportunities.”
The combined company, to be called ConocoPhillips, is expected to
achieve annual recurring cost savings of at least $750 million
within the first full year after the completion of the merger.
Mulva will serve as president and chief executive officer of
ConocoPhillips, while Archie W. Dunham, currently chairman and
CEO of Conoco, will serve as chairman. The new company will be
headquartered in Houston.
2001/11/18
Conoco and Phillips Agree to Merger of Equals
$35 Billion
Strategic Combination Creates Third-Largest Integrated U.S.
Energy Company
Conoco Inc. and Phillips Petroleum Company today announced that
their boards of directors have unanimously approved a merger of
equals, and that the companies have signed a definitive merger
agreement. The new company, which will be named ConocoPhillips,
will be a strong competitor with enhanced returns and accelerated
growth opportunities from an excellent financial and operational
position.
ConocoPhillips will be the third-largest integrated U.S. energy
company based on market capitalization and oil and gas reserves
and production. Worldwide, it will be the sixth-largest energy
company based on hydrocarbon reserves and the fifth-largest
global refiner.
As a premier global major, ConocoPhillips will have the size,
portfolio of high-quality assets, and the capabilities and
financial strength to generate enhanced value for its
shareholders. Specifically, ConocoPhillips will have:
・substantial growth
opportunities;
・world-class technology,
workforce and operational practices;
・significant opportunity to
enhance its exploration portfolio;
・diversified earnings and
cash flow;
・a strong balance sheet,
with an expected debt-to-capitalization ratio of approximately 35
percent;
・improved capital
efficiency; and
・an efficient cost
structure.
Under the terms of the agreement, Phillips shareholders will
receive one share of new ConocoPhillips common stock for each
share of Phillips they own and Conoco shareholders will receive
0.4677 shares of new ConocoPhillips common stock for each share
of Conoco they own. Based on the closing market prices for the
shares of both companies on Friday, Nov. 16, 2001, and their debt
levels as of Sept. 30, 2001, the new company would have an
enterprise value of $53.5 billion ($34.9 billion of equity; $18.6 billion of debt and preferred
securities). At inception, Phillips shareholders will own about
56.6 percent and Conoco shareholders will own about 43.4 percent
of the new company. The transaction is structured to be tax-free
to the shareholders of each company.
The transaction is expected to be accretive to earnings and cash
flow per share of each company after achieving anticipated annual
cost savings of approximately $750 million. The companies expect
to achieve the annual rate of synergies within the first year
after closing.
Upon completion of the merger, Archie W. Dunham, Conoco chairman
and chief executive officer, will serve as chairman of
ConocoPhillips and will delay his scheduled retirement to 2004.
James J. Mulva, Phillips chairman and chief executive officer,
will be president and chief executive officer of the combined
company, and also become chairman upon Mr. Dunham’s retirement. The ConocoPhillips board of
directors will consist of 16 directors, eight designated by each
of the two companies, including
Mr. Dunham and Mr. Mulva. ConocoPhillips will be headquartered in
Houston, with a significant and continuing presence in
Bartlesville and Oklahoma.
Mr. Dunham of Conoco said, “This
merger of equals represents an excellent strategic fit for both
Conoco and Phillips. It will position ConocoPhillips as a
stronger U.S.-based, global energy producer by significantly
enhancing its capability and growth prospects on five continents
in both current and prospective ventures, while generating major
synergies. It will create significant long-term value for the
shareholders of both companies, partly through cost savings, but
also because of a significantly larger portfolio of global
assets, skills and opportunities. With a very strong balance
sheet, more capital for upstream investment, and greater
operational efficiency downstream, ConocoPhillips will be a tough
new competitor to the larger global majors.”
Mr. Mulva of Phillips said, “This merger ensures that the United States
will be home to a third major international petroleum company.
For Conoco and Phillips, joining forces is the ideal way to be
competitive in the reshaped energy industry. ConocoPhillips will
move forward to deliver on our legacy growth projects, develop
new opportunities in existing and emerging business lines, and
enhance returns in our downstream business with our companies’
leading technologies. With our
greater financial strength and flexibility, we will be able to
fund these capital programs while also reducing our
debt-to-capitalization ratio, repurchasing shares and providing a
competitive dividend. Just as important, our compatible cultures,
similar values and determined focus will facilitate a smooth
integration and enable ConocoPhillips to get off to a fast and
successful start.”
Mr. Mulva added, “I want to emphasize that, reflecting our
companies’ deep roots in
Oklahoma, ConocoPhillips will continue to have a significant
operational presence here. ConocoPhillips intends to continue the
philanthropic and community commitments of Conoco and Phillips.
In addition, ConocoPhillips will initiate technology or other
partnership commitments with the University of Oklahoma and
Oklahoma State University.”
Superior Growth and Strong
Core Capabilities
In the upstream segment, ConocoPhillips’ global scale and presence will allow for
increased efficiency in core areas and delivery of legacy growth
projects. The combined company will have pro forma year 2000
hydrocarbon reserves of 8.7 billion barrels of oil equivalent
(BOE) and daily production of 1.7 million BOE, based on the
companies’ estimates for
2001 year-end production. ConocoPhillips will have numerous
legacy asset positions, including those in Alaska, Canada, the
Lower 48, the North Sea, Venezuela, China, the Timor Sea,
Indonesia, Vietnam, the Middle East, Russia and the Caspian area.
In the refining and marketing segment, ConocoPhillips will
operate or have equity interests in 19 refineries in the United
States, the U.K., Ireland, Germany, the Czech Republic and
Malaysia, with a refining capacity of 2.6 million barrels a day.
It will also have a strong marketing presence in the United
States.
In addition, ConocoPhillips will continue Phillips’ equity participation in the natural gas
gathering and processing joint venture, Duke Energy Field
Service, and in the chemicals and plastics joint venture, Chevron
Phillips Chemicals.
Substantial Return Enhancements and Value Creation
The companies expect the combined enterprise to achieve annual
cost savings of at least $750 million within the first full year
after closing. These savings will result from more efficient
exploration, production and downstream activities, and the
elimination of duplicate corporate and administrative positions,
programs and operating offices. A transition team led by Philip
L. Frederickson, Conoco’s
Senior Vice President Corporate Strategy and Business
Development, and John E. Lowe, Phillips’ Senior Vice President, Corporate Strategy
and Development, will begin work immediately to ensure
integration occurs quickly and smoothl
It is anticipated that upon closing of the transaction, the
ConocoPhillips board of directors will adopt a competitive
dividend policy. Currently, Conoco pays an annual dividend of
$0.76 per share and Phillips pays an annual dividend of $1.44 per
share.
The merger is conditioned upon, among other things, the approvals
of the shareholders of each company and customary regulatory
approvals. The transaction is expected to be completed in the
second half of 2002.
Morgan Stanley, Credit Suisse First Boston and Salomon Smith
Barney acted as financial advisors and Cravath, Swaine &
Moore acted as legal counsel to Conoco. Goldman, Sachs & Co.,
J.P. Morgan Securities Inc. and Merrill Lynch & Co. acted as
financial advisors and Wachtell, Lipton, Rosen & Katz acted
as legal counsel to Phillips.
Conoco Inc. is an integrated, international energy company with
operations in more than 40 countries. Headquartered in Houston,
Texas, the company had 20,000 employees and $27.7 billion in
assets at Sept. 30, 2001.
Phillips Petroleum Company is an integrated petroleum company
with interests around the world. Headquartered in Bartlesville,
Oklahoma, the company had 38,500 employees and $35.4 billion of
assets at Sept. 30, 2001.
Basell USA, ConocoPhillips sign
PP marketing agreement
Basell USA Inc and ConocoPhillips announced Tuesday the signing
of an agreement under which Basell will be the exclusive
purchaser and marketer of the polypropylene resins produced at
ConocoPhillips' new Bayway plant in Linden, NJ The 775-mil lb/yr
plant is scheduled to start up early next year. "We are
pleased to be joining forces with Basell, an acknowledged
worldwide leader in the production and sales of polypropylene, to
get Bayway's new polypropylene capacity into the
marketplace," said Tom Nimbley, ConocoPhillips' president of
downstream refining. Basell, a 50/50 joint venture of BASF and
Royal Dutch/Shell, is the world's largest producer and marketer
of polypropylene. The addition of the Bayway plant capacity will
increase the polypropylene capacity Basell sells in North America
to more than 4-bil lb/yr.