Texaco merger good for Caltex

Texaco merger good for Caltex

SINGAPORE (Reuters): A merger of Chevron Corp and Texaco Inc could benefit their Asian joint venture Caltex by focusing on its restructuring, analysts said on Monday.

Chevron is reported to be holding exploratory talks about taking over Texaco for US$80 per share, or about $42 billion.

Caltex, a 63-year-old refining and marketing joint venture, was likely to be a prime reason for bringing the two companies together, analysts said.

Caltex Corp was formed in 1936 to provide Chevron and Texaco with a global reach, adding Asia, Africa and the Middle East to existing sales outlets either side of the Atlantic.

The only significant overlap of the three companies in Asia is in the upstream sector.

Analysts said bringing Caltex under a single parent would accelerate an existing restructuring program, but also lead to harder questions about the viability of Caltex assets.