Ultramar, Phillips to Merge Some Operations

Ultramar Diamond Shamrock Corp. and Phillips Petroleum Co. announced plans for an $8-billion merger of their North American refining and marketing operations. The new company, to be called Diamond 66, will have annual revenue of $20 billion. The merger, which is expected to eliminate 1,000 jobs, is expected to produce annual savings of $125 million in 1999 and twice that in 2000, the companies said. Diamond 66 will have more than 12,000 service stations in 36 states and Canada, making it the seventh-largest U.S. oil refiner and giving it the fourth-largest market share. Under terms of the deal, expected to close early next year, San Antonio-based Ultramar will hold 55% of Diamond 66 and Bartlesville, Okla.-based Phillips 45%. The deal is subject to approval of both companies’ boards. Ultramar’s stock rose 31 cents to close at $23, while Phillips fell $1.25 to close at $45.38, in trading on the New York Stock Exchange.