Although a combined BP Amoco-ARCO entity would be much smaller, it would still control the vast majority of Alaska's North Slope crude oil field, which supplies many western states with gasoline. While BP Amoco officials note privately that the FTC has yet to approach the company with conditions that would render the merger acceptable an indication, the officials say, that rumors of the merger's demise may be wildly premature these negotiations could be rocky for everyone involved. Ironically, it may be the success of the Exxon-Mobil merger that poses the most substantial threat to BP Amoco-ARCO's plans. "When the FTC cleared the Exxon merger," says TIME business writer Daniel Kadlec, "they made a point of saying the oil industry is pretty much as consolidated as it should get." Which means the FTC could be drawing a big, red target mark right in the middle of BP Amoco's merger request forms.
In the world of multibillion-dollar mergers, as in love, timing is everything. And so it is that the Federal Trade Commission, fresh from sweating the details of the Exxon-Mobil merger, is now looking a bit skittish as it considers another colossal oil-company acquisition. According to the New York Times, the commission is worried that BP Amoco's $29 billion deal to acquire ARCO would violate antitrust laws. The rumors of rejection are especially surprising since the commission so recently blessed the $81 billion Exxon-Mobil merger. "There was concern in that merger that it represented too much consolidation in the oil industry," says TIME correspondent William Dowell. But once the companies agreed to divest themselves of several commercial holdings, the deal was approved.