West German Utility Company Agrees to Buy Texaco Subsidiary
ESSEN, West Germany (AP) _ A giant West German utility company, Rheinish-Westfaelisches Elektrizitaetswe rg AG, has agreed to buy Texaco Inc.’s German subsidiary for more than $1 billion, an RWE spokesman said Monday.
RWE, West Germany’s largest utility company, said it will pay $1.23 billion to Texaco for its West German subsidiary Deutsche Texaco AG.
The purchase is conditional on the approval of the West German Federal Cartel Office.
RWE spokesman Friedhelm Gieske told reporters Monday that the purchase agreement between RWE and Texaco’s holding company, Texaco International Financial Corp., was signed in Luxembourg earlier in the day.
He said he expected the Federal Cartel Office to approve the sale and that RWE would take over by the end of the month.
The sale, long expected, comes as the first major step in Texaco’s plan to shed $5 billion worth of assets as part of a restructing plan following its emergence from Chapter 11 Bankruptcy Court protection in April.
RWE will include the Texaco subsidiary into a newly formed unit, RWE Mineral Oil and Chemical Corp., Gieske said.
RWE also said it is conducting talks with Norway’s state oil company Statoil to see if the Norwegian company would be interested in taking a stake in the new RWE unit.
Statoil could supply crude oil to the West German market and also use its efficient refineries to supply that market with oil products, RWE said.