BP Amoco Agrees Recommended Cash Offer To Buy Burmah Castrol For £3 ($4.7) Billion
- Cash offer of £16.75 per share
- Recommended by Burmah Castrol board
- BP Amoco to make Castrol its leading lubricants brand
- Strong brands and innovative skills for powerful future growth
- Large customer base and new global markets
- Pre-tax savings of $260 million a year by 2003
LONDON, 14 March 2000: In a move that will powerfully boost the brand impact and growth potential of its global lubricants business, BP Amoco today announced that it has agreed to buy Burmah Castrol for £3 ($4.7) billion. The recommended cash offer of £16.75 per share for Burmah Castrol has been agreed by the boards of both companies.
Following the acquisition, Castrol will become BP Amoco's leading lubricants brand, with its products made available through the group's 28,000 retail sites and to BP Amoco's automotive, industrial and marine customers around the world. The acquisition will bring BP Amoco millions of new customers, giving the combination access to emerging markets where BP Amoco currently has a limited presence and making Castrol products available to BP Amoco's massive customer base worldwide.
BP Amoco chief executive Sir John Browne said: "Castrol is one of the great lubricants brands of the world. It is a name that stands for superbly engineered products of the highest quality, and research and development that has consistently kept those products at the forefront of the marketplace. "Castrol brings outstandingly innovative marketing and brand-management expertise. Combining those attributes with BP Amoco's ability to build highly profitable, performance-driven businesses will create a distinctive global lubricants operation able to compete effectively with even the strongest competitors.
"Put simply, the combination will add millions of new customers worldwide and give BP Amoco access to emerging markets where we currently have a limited presence. It will make Castrol products available to our own massive customer base worldwide, including commercial and industrial users. The result will powerfully strengthen our existing business and give us entry to new markets that offer immense potential for continuing growth."
Burmah Castrol chairman Jonathan Fry said: "The board of Burmah Castrol unanimously recommends that Burmah Castrol shareholders accept BP Amoco's offer. The combination with BP Amoco will provide significant new opportunities for Castrol's businesses and employees."
The lubricants businesses of BP Amoco and Burmah Castrol will be merged to form a new lubricants division run by a management team drawn from both companies and based at the Swindon offices of Burmah Castrol. David Baldry of BP Amoco will head this new division.
BP Amoco's Offer, which will be pre-conditional on certain regulatory clearances, will be £16.75 in cash for each Burmah Castrol share, valuing Burmah Castrol at approximately £3 ($4.7) billion. This represents a premium of 61% over the average Closing Price for Burmah Castrol shares for the three months to 10 March 2000 (the last day preceding the announcement that BP Amoco and Burmah Castrol were in discussions about a possible offer). The premium is 74% over the Closing Price for Burmah Castrol shares on 10 March 2000. Burmah Castrol shareholders will retain the right to receive the final dividend of 31.9 pence per share declared on 28 February 2000. There will be a Loan Note Alternative to the Offer.
The formal offer document will be sent to Burmah Castrol shareholders when the pre-conditions of the Offer, which involve obtaining regulatory clearances, have been satisfied or waived. Morgan Stanley Dean Witter are acting for BP Amoco J Henry Schroder & Co. Limited and Wasserstein Perella & Co. Limited are acting for Burmah Castrol. Credit Suisse First Boston and Cazenove & Co. are acting as joint brokers to Burmah Castrol.
This press announcement does not constitute an offer or invitation to purchase any securities or a solicitation of an offer to buy any securities, pursuant to the Offer or otherwise.
The Offer will not be made directly or indirectly, in or into Canada, Australia, Japan or New Zealand. The Offer will not be capable of acceptance from within Canada, Australia, Japan or New Zealand and doing so may render invalid any purported acceptance.
The availability of the Offer or the Loan Note Alternative to Burmah Castrol shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Burmah Castrol shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
Morgan Stanley & Co. Limited, which is regulated in the United Kingdom by The Securities and Futures Authority Limited, is acting for BP Amoco and for no one else in connection with the Offer and will not be responsible to anyone other than BP Amoco for providing the protections afforded to customers of Morgan Stanley & Co. Limited nor for giving advice in relation to the Offer.
Wasserstein Perella & Co. Limited, which is regulated in the United Kingdom by The Securities and Futures Authority Limited, is acting for Burmah Castrol and for no one else in connection with the Offer and will not be responsible to anyone other than Burmah Castrol for providing the protections afforded to customers of Wasserstein Perella & Co. Limited nor for giving advice in relation to the Offer.