FOR IMMEDIATE RELEASE:
November 30, 1999
Attorney General J. Joseph Curran, Jr. announced today that Maryland, along with eight other states in the Northeast and the District of Columbia, has entered into a settlement agreement with Exxon Corporation and Mobil Corporation which will permit the two companies to merge but which requires the divestiture of more than 100 Mobil stations in Maryland and over 1,500 Exxon and Mobil brand gas stations in the other states and the District of Columbia that are a party to the settlement.
The Maryland Attorney General's Office has been conducting its investigation of the proposed merger between Exxon and Mobil in conjunction with other states and the Federal Trade Commission since the merger was first announced in the fall of 1998. Settlement discussions began in earnest in early September and have resulted in today's filing of four separate decrees covering different geographic areas in the United States with different competitive issues.
The Northeast Consent Decree, which includes Maryland, mandates the divestiture of all the retail assets of Mobil to a single purchaser, in the states of Maryland, Virginia, Pennsylvania, New Jersey and Delawre as well as the District of Columbia. The consent decree will also require the divestiture of all the retail assets of Exxon, to a single purchaser, in the states of New York, Connecticut, Rhode Island, Vermont, New Hampshire and Maine. The retail assets include gasoline stations owned by Mobil and Exxon that are either leased to independent dealers or operated by the company. For those stations which are owned and operated by an independent distributors but supplied by Exxon or Mobil, the two oil giants will sell the supply contracts to the same purchaser. The merging parties will also grant the purchaser the exclusive right to use the Mobil and Exxon brand name and various collateral products, without a licensing fee, for five years. Dealers that operate Mobil and Exxon stations will continue to operate them under current lease and supply contracts.
Exxon is the largest retail brand in Maryland with approximately 240 service stations. Mobil is fourth with approxiomately 120 stores. Without divestiture, the market share for the merged entity would approach 35% in the Baltimore/Washington corridor. With such a large market share, the merger could substantially lessen competition for retail gasoline throughout the area. For that reason, Attorney General Curran and the FTC have insisted on the divestiture of the entire Mobil brand in the State to a single purchaser that will be a strong competitor in the retail gasoline market in Maryland. Attorney General Curran said, "This settlement will preserve competition for retail gasoline in Maryland while protecting the right of Exxon and Mobil dealers to continue to operate their businesses as they see fit." The Attorney General noted that no decision had yet been made on the purchaser of the divested assets but that his office, the other states in the Northeast that joined the decree, and the FTC have the right to approve any purchaser.
Under the decreees being filed by the FTC and the other states involved in the settlement, assets, including retail stations, interests in pipelines and refiners, will be divested in the states of California, Alaska, and Texas and overseas.