Union-Pure Merger Over the Hump Pure Oil and Union Oil have cleared what should be the last hurdle in their long and livery struggle to merge, and to stay merged. The Justice Department says that it does not now contemplate action against the merger. Also, the number of unhappy Pure Oil stockholders asking for cash instead of Union Oil stock for their shares is too small to present a threat to the merger. Since directors of the two companies first agreed tentatively on the merger, in February, a small but verbose group of Pure Oil stockholders has been threatening proxy fights and legal actions. This group maintains that several offers received by Pure Oil were better than the Union Oil offer. The merger of the two companies was approved at special stockholder meetings early last month and formally completed two weeks later. The merger creates a major new oil company with annual sales of about $1.2 billion. Los Angeles-based Union Oil, the surviving company, markets largely in 12 western states. Pure Oil, which is headquartered in Illinois but incorporated in Ohio, will become a division, marketing in the Midwest and the South. Some corporate functions, such as management, production, exploration, and research, will be consolidated. The late threat of government investigations arose when Rep. Robert E. Sweeney (D.-Ohio) expressed fear that the merger may result in the closing of Pure Oil refineries in his state. He asked for separate investigations of the merger by the Justice Department and by the Securities and Exchange Commission. Rep. Sweeney met with Union president Fred L. Hartley, who assured him that there would be no phasing out of operations in Ohio. Also Rep. Sweeney has been assured by the Justice Department that it contemplates no action against the merger. It now seems also that the dissident Pure Oil stockholders can take no effective action against the merger. Union Oil says that holders of only about 2.5% of the 10 million outstanding shares have asked for cash—about $80 per share. They are being offered $50. 24
C & E N AUG. 2, 1965
Robert D. Goodall New head of Grace division
Davison Chemical Has New President Robert D. Goodall, 53, is the new president of the Davison Chemical division of W. R. Grace. Grace said last week that the former executive vice president has been named to succeed William E. McGuirk, Jr. Mr. Goodall will also be president of Davison Chemical, Ltd. (the Canadian affiliate of Davison), and chairman of the board of directors of Nuclear Fuel Services (a majority-owned subsidiary of W. R. Grace). Mr. Goodall joined Davison as a trainee salesman in 1939. Later he was promoted to sales engineer and general sales manager. In 1958 he was appointed vice president and general manager of the chemicals division. He became executive v.p. in 1963. Mr. McGuirk resigned as president of Davison to become chairman of the executive committee of Mercantile Safe Deposit & Trust Co. in Baltimore.
Consent Agreement Ends Phosphate Pricing Case A consent agreement has ended the Justice Department's civil action against three chemical companies for allegedly fixing the prices of phosphate fertilizers in the 11 western states. Defendants in the suit were California (now Chevron) Chemical, a subsidiary of Standard Oil of California; Cominco Products, a subsidiary of Consolidated Mining and Smelting; and J. R. Simplot Co. The Federal Government had charged violation of the Sherman Act
in a criminal action filed in May 1964 against these companies plus BalfourGuthrie and Co., and Western Phosphates. The indictment alleged that the five agreed on special distributor discounts, uniform differentials between the prices of bagged and bulk materials, and uniform credit terms. The companies pleaded no contest to the charges and were fined a total of $66,500 in July 1964 (C&EN, May 11, 1964, page 23; Aug. 3, 1964, page 21). Balfour-Guthrie was not named in the civil suit because it had ceased to be a sales agent for Cominco Products the previous January and was no longer in the phosphate business. Western Phosphates was dropped because it had become a division of Stauffer Chemical. It was formerly an independent company owned 50% by Stauffer. The consent judgment, filed in U.S. District Court, Los Angeles, enjoins the three remaining defendants from discussing or agreeing on any price information or sales terms of phosphate fertilizers. Also, if each company has not already done so, it must review its prices and adopt new price lists that consider only its own costs, profits, losses, and "any other lawful factors."
LBJ Patent Study Not Likely to Be on Time The White House at last has agreed on who will make up the President's Commission on the Patent System (see box). The naming of the 10 nongovernmental members of the commission came almost four months after the commission was officially established by the President (C&EN, April 19, page 26). President Johnson has given the commission the broad assignment of "determining how well the patent system currently serves our national needs and international goals . . . , devising possible improvements," and "recommending any legislation required to strengthen the system." But chances are good that the Administration has instructed the commission to steer clear of the controversial and highly important issue of government patent policy. The Administration can reasonably be assumed to feel that, with all of the discussion and action under way on this subject already in Congress, any rec-
Sun Asks Feedstock Quota for Puerto Rico Sun Oil revealed last week that it had joined the seemingly endless list of oil companies who are asking for feed stock import quotas for Puerto Rico. Sun is asking for a quota of 60,000 barrels per day of foreign crude. The company says it would use the feed stock to supply a lubricating oil plant. In a letter to Interior Secretary Udall, Sun says that for more than 50 years it has sold lubricating oils from its U.S. plants in world markets. The company goes on to say that "recently, because of foreign refinery construc tion and the ability of foreign refiners to use lower-cost raw material than is available to Sun because of the U.S. oil import program, the company has been losing markets." This situation "will grow increasingly difficult," Sun predicts, and "the markets we have . . . served . . . from the U.S. will be cap tured by refineries . . . in other na tions." The rule of thumb on feedstock (naphtha or crude) is that foreign material costs about $1.00 a barrel less than domestic material. The situ ation involves a number of factors: feedstock quality, refinery accounting,
ommendations by the commission would serve only to muddy the water further. If this is in fact the case, it will come as a disappointment to many in the chemical industry. They feel that government policy is perhaps the sin gle most overriding patent issue and, as such, should get a thorough going over by the commission. The commission apparently still is working under the original deadlines set by the President in Executive Order No. 11215 of April 8. It was instructed then to come up with a pre liminary report a year from that date and its final report within six months after that. But so far no executive secretary has been named to arrange for staff, quarters, and other general house keeping details for the commission. What with summer and vacation time, the commission is unlikely to get down to serious business until September at the earliest. This probably means that President Johnson will have to extend the original life of the commis sion by three to six months.
ώ whether the user buys or produces his feedstock. But in general, a $1.00'"; per-barrel difference would put for eign feedstock at about two thirds the he cost of domestic material. )ta Sun's request for a feedstock quota in Puerto Rico has been preceded by similar requests from six other compa >anies—Standard Oil (N.J.), Standard rd Oil (Ind.), Sinclair, Tenneco, Cities ies Service, and American Mineral Spirits. ts. Undoubtedly these requests have ve been prompted largely by Secretary ry UdalFs approval of an import quota >ta for Phillips Petroleum in Puerto Rico. x>. Phillips' plans are still subject to the he approval of President Johnson, but 'Ut such approval seems at this point to be a formality. The company has Las awarded a construction contract for or its petrochemical complex in Puerto to Rico and has picked a manager for the he operation. Also, Phillips plans to bring into the U.S. 24,800 barrels per ler day of gasoline made in Puerto Rico. Secretary Udall still must decide de what to do about Puerto Rican import >rt quotas. To offer a quota to any and ad all companies would undermine the he U.S. oil import program (now under ier review-C&EN, June 28, page 19). )). To refuse all but Phillips would ex ÎXpose him to cries of favoritism.
Price Fixing Charged to 18 Asphalt Makers Liquid asphalt producers have denied charges of price fixing brought against them in an indictment returned b y a federal grand jury in U.S. District Court in St. Louis. T h e indictment alleges that, beginning sometime before 1 9 6 0 and continuing through 1 9 6 3 , 18 oil and asphalt companies, and 17 of their officers, conspired to rig bids and fix prices in selling liquid asphalt to the state of Missouri in violation of the Sherman Antitrust Act. During that period Missouri bought about $ 1 5 million worth of liquid
asphalt from the 18 companies. Liquid asphalt is a refining byproduct used to maintain roads, The companies named in the criminal action: American Oil, Union Asphalts & Roadoils, Phillips Petroleum, Socony Mobil, Skelly Oil, Shell Oil, Sinclair Refining, Missouri Petroleum Products, Rock Hill Asphalt & Construction, Allied Materials Corp., American Petrofina Co. of Texas, Hydrocarbon Specialties, Delta Refining, Kerr-McGee Oil Industries, Saunders Petroleum, Trinidad Asphalt Mfg. Co., APCO Oil Corp., and Wilshire Oil Co. of Texas.
Patent Commission Has 10 Private Members, Four from Government Chairman: Dr. Harry Huntt Ransom Chancellor University of Texas
Simon H. Rifkind Attorney Paul, Weiss, Rifkind, Wharton & Garrison
John Bardeen Scientist University of Illinois
Horton Guyf ord Stever President Carnegie Institute of Technology
James Birkenstock V.P., Commercial Development International Business Machines Corp.
Charles Thornton President Litton Industries
Howard W. Clement Patent Attorney and Chairman of the Board of Trustees University of Illinois Howard Nason President Monsanto Research Corp. Sidney Neuman Patent. Attorney Pendleton, Neuman, Seibold & Williams Bernard Oliver V.P., Research & Development Hewlett-Packard Corp.
John T. Connor Secretary of Commerce Robert S. McNamara Secretary of Defense Eugene P. Foley Administrator of the Small Business Administration Leland J. Haworth Director of the National Science Foundation
The Secretary of State, Dean Rusk, and the Director of the Office of Science and Technology, Dr. Donald F. Hornig, may sit with the commission as observers. AUG.
2, 1965
C&EN
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