Mobil Corp. apparently is attempting to negotiate an agreement with the Federal Trade Commission that would allow the firm to acquire Marathon Oil but would require that the Ohio-based company be kept intact and separate in case the government decides later it must be divested.
"I don't want to confirm or deny that the document exists. Negotiations are continuing," said Thomas J. Campbell, director of the bureau of competition in the FTC. "I don't want to prematurely make a comment on a matter that might not be final."
A copy of a proposed draft "hold separate" agreement spells out terms that would allow Mobil to move forward with its takeover but would keep the major oil firm from making major changes in Marathon while the FTC continues to study whether the merger would have adverse consequences on industry competition.
Mobil has proposed to acquire the smaller firm for $5.1 billion. Marathon officials have urged stockholders to reject the bid and have gone to court in an attempt to bar the takeover.
The purpose of the proposed agreement, according to the draft, is to ensure "the continued viable existence of Marathon as a readily identifiable and separate competitor in the markets in which Marathon currently operates or in any market into which it might expand in the future" while the FTC completes its investigation of the merger.
The FTC has negotiated similar agreements in other takeover investigations, including the ultimately successful Exxon takeover of Reliance Electric Co.
A Marathon representative said the firm was aware of the existence of the draft. "We would be shocked if the staff of the FTC would agree not to look into the proposed takover of Marathon by Mobil in accordance with the procedures provided for by law," Michael Russo said.
"We find it inconceivable that the staff would allow Mobil to complete its offer without even having available relevant information as provided for by the Hart-Scott-Rodino act," he said. "That law provides for an examination of the facts before an acquisition goes forward, not afterward."
Appropriate Mobil officials could not be reached for comment on the proposed draft.
In related developments yesterday, Findlay, Ohio, rallied behind Marathon, the largest employer in the town of 35,000. Approximately 5,000 townspeople paraded in downtown Findlay to demonstrate their opposition to Mobil, and the town was decorated with red ribbons -- Marathon's color.
Marathon's president and chief executive, Harold D. Hoopman, called the proposed takeover an act of "high-handed arrogance." Residents of Findlay demonstrated in front of Marathon headquarters carrying "I Love Marathon" and other signs of support.
One schoolchild carried a sign that read "I love, No. 1 Marathon, No. 2 motherhood and No. 3 apple pie." Two Findlay women composed a song called "We Believe in Marathon" for the occasion. Part of its lyrics were: "Let's lift our voices to the sky to keep Mobil out of here." CAPTION: Picture 1, Citizens of Findlay, Ohio, march in front of Marathon Oil headquarters yesterday to protest an attempted takeover by Mobil Oil Corp., which has offered $5.1 million. AP