TULSA, Okla. (AP) -- Phillips Petroleum Co. is merging with Conoco Inc. in a $15.4 billion stock deal, creating the nation's third-largest oil and gas company with 17,000 filling stations across the country.
Phillips, which bought the refining company Tosco Corp. earlier this year, will gain extra strength as a producer of petroleum. The combined market value of the new company, ConocoPhillips, would be $35 billion.
"This is really a growth story for Conoco and Phillips," said Conoco chairman Archie W. Dunham, who is delaying a planned retirement to serve as chairman of the combined company.
The deal, described by the two rivals as a merger of equals, would put ConocoPhillips behind Exxon Mobil Corp. and ChevronTexaco Corp. in the United States and rank them sixth-largest in the world.
Conoco sells gasoline, diesel fuel, and other petroleum products at 5,000 outlets in the United States, while Phillips sells fuel at more than 12,000 stations under brands such as Phillips 66, Circle K, and 76.
Phillips Chairman James Mulva, named chief executive and president of the new company, said consumers will benefit from the $750 million in operating savings expected from the merger.
"What we saw was just an ideal time for us to put our growth plans together," Mulva said.
The Conoco-Phillips marriage, approved by the boards of both companies Sunday, is subject to approval from shareholders and regulators, and is expected to close in the last half of 2002.
Phillips shareholders are to get one share of ConocoPhillips stock for each Phillips share they own. Conoco shareholders will get .4677 shares of the new stock. Phillips shareholders will end up with a 56.6 percent stake in the company.
The deal follows mergers that created ExxonMobil and Chevron-Texaco and the BP Amoco takeover of Atlantic Richfield, as energy companies look for size and breadth to gain a competitive edge. The trend has raised concerns about control over retail gasoline markets.
Conoco and Phillips have a combined global work force of 58,000 employees, and the merger will create the fifth-largest global refiner. The new company would be based in Houston, home to Conoco.
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