Shell Oil announced Mar. 25 it has entered into an agreement to acquire Pennzoil-Quaker State Co., the nation's biggest producer of motor oil, for $1.8 billion in cash.
Under the deal, Shell, a unit of Royal Dutch Petroleum Co., will pay $22 a share in cash and assume $1.1 billion of debt.
Reportedly, Shell spokeswoman Gail Schutz said the acquisition would mean about 1,230 job cuts, or about 15 percent of the two firms' combined work force. Shell said the deal has already been approved by Houston-based Pennzoil-Quaker's board of directors, and is expected to be completed during the second half of 2002. It is still subject to regulatory and shareholder approval.
Pennzoil-Quaker State owns the nation's biggest group of oil-change stores, Jiffy Lube, which has 2,150 locations across the United States. Shell Oil, also based in Houston, explores, produces and markets oil, natural gas and chemicals. It has reserves of 1.2 billion barrels of oil and 1.9 trillion cubic feet of natural gas.
Its parent company, Royal Dutch/Shell Group, is the third biggest petroleum company in the world behind Exxon Mobil and BP.