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By Published on .

The Federal Trade Commission is expected to approve, perhaps as early as this week, a proposal by Shell Oil Co. and Texaco to merge their U.S. marketing, refining, transportation and lubricant businesses.

The planned deal also involves Saudi Aramco, already marketing Texaco products in the eastern half of the U.S. under a 1989 joint venture with Texaco called Star Enterprises.


When Shell and Texaco announced their plans earlier this year, both marketers said their brands would stay separate. The new company they plan to form, like Star, wouldn't be branded and will be virtually invisible to the general public.

Ogilvy & Mather's Houston office handles Shell's $30 million corporate and retail advertising. BBDO Worldwide, New York, has Texaco's $60 million corporate account and its $35 million retail and product business.

Both marketers launched new campaigns this year, and those efforts and agencies will not be affected by the planned combination.


However, the deal is likely to create an undetermined number of layoffs as marketing staffs are combined and other operations merged, said Chris Gidez, manager of corporate communications for Texaco.

About 700 people work in marketing for the Shell Oil Products Co. subsidiary, which would be the only Shell entity affected by the deal. At Star, about 630 work in marketing.

In 1989, Texaco's marketing employees were transferred to the Star startup with Saudi Aramco, and there were no job cuts.

Neither Shell nor Texaco operates in all 50 states, but they do compete in many states. Texaco operates in 46 states, Shell in 39.

Both companies declined to discuss specifics of the planned merger until FTC

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