The planned $83.9 billion merger between Exxon Corp. and Mobil Corp. remains on hold because of antitrust regulators' concerns about finding strong buyers for the service stations that the two companies will have to sell, according to sources close to the negotiations.
Lawyers for the Federal Trade Commission are not yet convinced that prospective buyers can offer viable competition to the combined Exxon-Mobil behemoth, sources said yesterday. Regulators are insisting that the two companies sell more than 1,500 service stations in the Northeast and mid-Atlantic regions to dilute their market power.
Exxon and Mobil, which had hoped to conclude the merger last month, issued a statement yesterday saying, "From the beginning, we understood a merger of this scope would require an extensive review. Based on our ongoing discussions with the commission, we fully expect the FTC to complete its review soon." An Exxon spokesman declined to comment further.
The merger, announced Dec. 1, 1998, was approved by European regulators Sept. 29, after the companies agreed to what analysts said were relatively minor asset sales.
In a report yesterday Bloomberg News cited people familiar with the negotiations as saying that the companies had agreed to sell off stations between Maine and Virginia, but had not reached agreement with the government over who the buyers would be.
Financial analysts have stressed the importance of an agreement to the two oil giants, which would result in projected savings of $2.8 billion over the next three years by combining operations and downsizing.
The companies say they expect to eliminate more than 9,000 jobs out of their combined global work force of 120,000 employees after the combination occurs.
Shares of Exxon, based in Irving, Tex., dropped 43 3/4 cents yesterday, to $76.06 1/4, while Fairfax-based Mobil fell $1.25, to $99.62 1/2.