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State Says No Deal to Exxon-Mobil
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Business New Haven
12/13/1999
By: Michele Beck
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HARTFORD - Attorney General Richard Blumenthal has announced that Connecticut will not join a settlement allowing the multibillion-dollar merger of Exxon Corp. and Mobil Corp. to go forward. The Federal
Trade Commission announced its approval, along with more than a dozen other states.
Blumenthal participated in a year-long investigation and then declined approval of the deal, citing possible anti-consumer effects of increasing concentration in the industry. He believes that higher prices and a lower quality of service would occur as a result of the merger.
"This huge combination may harm consumers, hamstring competition and threaten dealers. Our declining to approve the deal makes a statement and more fully preserves options for future action," Blumenthal said.
"While one or a few states standing alone would face formidable obstacles in blocking the merger, we can at least send a strong signal. We can also demonstrate the potential detriment to service-station owners who are on the front line serving consumers," he added.
Under the Petroleum Marketing Act, Exxon's franchised dealers currently have certain protections which, among other things, prohibit Exxon from failing to renew a franchise if the company tries to charge a dealer unreasonable high rent or an excessive price for wholesale fuel.
However, it is unclear whether the rights afforded under the PMPA
would remain intact following the merger.
Plans for the deal were announced last year. Exxon's and Mobil's combined stocks are valued at about $80 billion. This deal would be one of the largest corporate mergers in U.S. history, surpassing the $72.6 billion merger of Travelers Group and Citicorp.
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