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SAN ANTONIO -- As expected, the U.S. Federal Trade Commission yesterday officially approved Valero Energy Corp.'s acquisition of Ultramar Diamond Shamrock Corp. as long as the companies sell a refinery and 70 service stations in California.
FTC commissioners voted 4-0 not to oppose the deal after the company agreed to sign a consent decree that requires them to sell Ultramar's 168,000 barrel-per-day (BPD) Golden Eagle Refinery in the San Francisco Bay Area, the agency said.
The companies have said they expect to complete the merger on Dec. 31 and plan to sell the Golden Eagle refinery by the second quarter of 2002. The FTC estimated the deal is worth about $6 billion and would create one of the largest U.S. oil refiners.
Without the divestments, the FTC said, the merger could have given the companies too much control over the supply of specially formulated gasoline that meets the state's strict environmental standards.
That would have cost California consumers more than $150 million a year and made the market vulnerable to price spikes, the FTC said.