BP has confirmed that its merger with US group Amoco to form the UK’s biggest company is on track for completion at the end of the year. To be known as BP Amoco, the merged company will have its world headquarters in London.
Company chairman Sir John Browne made the announcement as BP unveiled a 40% drop in profits, which it blamed on a collapse in oil prices by a third over the last year.
Replacement cost operating profits at BP slumped to £416m in the three months to the end of September down from £691m last year. The replacement cost figures are calculated to take into account the effects of price changes on a company’s stocks and assets such as plant and machinery.
Profits for the full nine months stood at £2.37bn down from £3.4bn last year. Although profits were sharply lower the figures were in line with analyst expectations and shares in the group jumped as traders took heart from the group’s bullish statements on its takeover of Amoco.
Shareholders will meet to vote on the deal on November 25.
The merger will create the world’s third largest oil company after Exxon and Shell with a value of £80bn.
EGi News 04/11/98
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