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BRIEFLY / HEAVY INDUSTRY

BP Amoco to Buy Castrol's Parent Firm

March 15, 2000|Reuters

British oil giant BP Amoco agreed to buy British lubricant firm Burmah Castrol for $4.7 billion in cash to get hold of the Castrol brand name. The deal is worth about $25 per Burmah Castrol share--a 74% premium over the price on March 10, the last trading day before news of the talks broke. David Baldry, head of BP Amoco's new global lubricants division, said the takeover will result in 1,700 job cuts worldwide. The deal could raise competition concerns at the European Commission and the Federal Trade Commission. BP Amoco is already involved in a complicated FTC investigation that threatens to derail its $27-billion bid for Los Angeles-based Atlantic Richfield Co. Analysts said the deal is a good one for both BP Amoco and Burmah's shareholders. BP Amoco, the world's third-largest oil company, has been without a recognized global lubricant brand. BP's American depositary receipts fell 44 cents to close at $51.13 on the New York Stock Exchange.

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