CALIFORNIA : Arco Stockholders Decisively OK Merger With BP Amoco

Pumped by stirring multimedia presentations of Arco’s sweeping history and an appearance by colorful former Chairman Robert O. Anderson, shareholders of Atlantic Richfield Co. on Monday overwhelmingly approved the merger of the Los Angeles-based oil company into giant BP Amoco.

Slightly more than 97% of the shares voted favored the merger, representing about 75% of the Arco shares eligible to vote. BP Amoco shareholders are expected to approve the $29-billion marriage at a meeting Wednesday in London.

But other hurdles remain, as U.S. and European regulators continue to scrutinize the combination.

Both the U.S. Federal Trade Commission and the European Union are expected to require the companies to sell such assets as refineries and gasoline terminals and stations to reduce the market concentration that would result from combining the companies.

Gov. Tony Knowles of Alaska, where the companies together would control 70% of oil and natural gas production, last week issued a list of conditions for approval. California Atty. Gen. Bill Lockyer is also examining the proposed merger.

Consumer activists and environmentalists have criticized the proposed merger, and Greenpeace filed comments Friday with the FTC in opposition to the matchup.

BP Amoco, the world’s third-largest publicly held oil company, agreed to buy Arco, the eighth-largest U.S. oil company, in April in a stock swap valued at $90.51 a share based on Monday’s $110.38 closing price for BP Amoco’s American depositary receipts. Arco shares closed Monday at $86.13, down 25 cents. Both issues trade on the New York Stock Exchange.

At the Arco special meeting, Arco Chairman and Chief Executive Mike Bowlin said BP Amoco expects to continue Arco’s leadership in philanthropic and arts sponsorships and will make no changes in Arco’s low-price gasoline strategy.

Bowlin said the company expects the merger to close by year’s end and is sticking with its original estimate of 2,000 job cuts.

“We have been and still are a top-rate domestic oil company,” Bowlin said, explaining his reasoning for approaching BP Amoco late last year.

“I believe bigger is better in today’s oil and gas industry” because of lower price cycles and the deep pockets needed for international oil exploration, he said.

When the 82-year-old Anderson, minus his trademark cowboy hat, was introduced, the friendly crowd, packed with current and retired employees, cheered him like a rodeo champ and gave him a prolonged standing ovation.