LONDON -- Tony Hayward, BP's new CEO, has denied the rumor of a merger with rival oil company Royal Dutch Shell, reported The Financial Times.
A report earlier this month by The Times of London said BP and Shell were thought to have revived plans for a merger to create an oil giantthe world's biggest, surpassing ExxonMobilwith a market value of 250 billion ($503.17 billion U.S.). The newspaper said that Britain's two largest oil companies had engaged financial advisors to discuss terms for a so-called friendly merger that could result in 2.5 billion ($5.03 [image-nocss] billion U.S.) of cost savings for the enlarged group.
Another report, by The Daily Mail, speculated that such a merger would win approval by government regulators, but that both companies would have to dispose of some assets.
According to the Financial Times, however, Hayward said the two companies had not been discussing a deal, and such a deal would do nothing to resolve the problems BP faced anyway.
Speaking as BP unveiled what he described as disappointing profits for the first half of 2007, Hayward said there was absolutely no substance to any speculation of a merger plan.
Rumors of a tie-up between BP and Shell intensified after a deal, which would then have amounted to a takeover by BP, was considered by Lord John Browne, Hayward's predecessor, in 2005, said the report. Browne recently stepped down amid financial and personal scandals.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.