Exxon Chemical Co. and units of Royal Dutch/Shell Group have agreed to merge their petroleum additives businesses.
The move reflects increasing competitiveness in the fuel and lubricants additives markets.
Merger details
The combined companies would have about one fourth of the global market for petroleum additives.
Exxon's Paramins division and Shell International Chemicals Ltd. and Shell Chemical Co. propose forming an independent company, owned 50-50, that would combine their additives operations.
The new company is tentatively slated to start operations in 1997, pending government and regulatory approvals.
Last year Paramins and Shell's additives units had combined revenues of more than $1.5 billion, out of an estimated global additives industry market of more than $6 billion.
Effect on jobs
Paramins currently has 1,600 employees worldwide, and Shell Additives has 400, excluding manufacturing.
Job losses are expected where the companies' business are complementary.
A Shell official said the impact on jobs will vary according to region and business function, but there is so far no estimate of numbers of job cuts involved.
Exxon currently has four additives research laboratories around the world compared with Shell's three. The combined companies will have two laboratories each in the U.S. and U.K.
There are 15 Paramins manufacturing plants worldwide now and five Shell plants.
Similarly, there will be two plants in the U.S., as well as three producing units in France.
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