BRUSSELS, Belgium (AP) _ European Union regulators decided Wednesday to launch an extended antitrust probe into Franco-Belgian oil giant Totalfina SA’s proposed $52 billion purchase of French rival Elf Aquitaine SA.
``The merger ... raises serious doubts as to its compatibility with (EU) competition rules,″ a statement by the EU executive Commission said.
It said the takeover could create dominant positions in France on the markets for the wholesale distribution of fuels, the retail distribution of fuels on motorways, the production and sale of liquefied petroleum gas and the supply of jet fuels to airports in Toulouse and Lyon in France.
The EU decision had been widely anticipated given the scale of the deal which will create the world’s fourth largest oil group and France’s largest company.
An extended investigation gives the European Commission’s regulators another four months to determine if the deal infringes EU rules on fair business competition.
In a statement, Totalfina said the Commission’s decision ``in no way affects the timetable″ for the takeover bid. Totalfina’s share swap offer is due to close Oct. 15, with results published Oct. 27.
Totalfina chairman Thierry Desmarest met last week with EU Competition Commission Mario Monti to discuss the takeover bid.
London’s Financial Times reported Wednesday that Desmarest offered to spin off highway gasoline stations, oil pipelines and liquid petroleum gas interests in order to allay the EU’s competition concerns.
The paper reported the offer fell short of the Commission’s demands and the companies will likely have to commit to further divestment’s in order to secure EU approval for the deal.
Last week, the Commission cleared two giant oil mergers _ one between Exxon Corp. and Mobil Corp., and the other between BP Amoco PLC and Atlantic Richfield Co. - after the companies agreed to sell business in areas where they were seen gaining anticompetitive positions.