DONNA KELLEY, CNN ANCHOR: Another energy merger in the works. Phillips Petroleum and Conoco have agreed to merge and CNN's Allan Chernoff says it's a $35-billion deal that will shrink competition and boost profits.</s>ALLAN CHERNOFF, CNN CORRESPONDENT: It's a combination that will bring two large U.S. oil companies into the big leagues. Phillips Petroleum of Bartlesville, Oklahoma and Conoco of Houston where the combined company would be based. Both had watched as Exxon joined with Mobil and Chevron combined with Texaco. ConocoPhillips would rank number three behind the giants. While Conoco has higher revenue, Phillips is the dominant company in the merger thanks to its higher stock market valuation. Phillips' shareholders will own 56.6 percent of the new company -- Conoco holders, 43.4 percent, and James Mulva of Phillips will run the combined company as CEO and President. Conoco's Archie Dunham will defer his planned retirement to remain as Chairman of the Board. The company's plan to cut $750 million in annual expenses including plenty of jobs, although they're not giving an exact number yet. With the price of oil plunging to two and a half-year lows and both companies' stock prices sinking near 52-week lows, the merger would help balance each company. Phillips is weighted towards refining and marketing. Conoco is more of an exploration and production firm. While Conoco has a greater presence in Europe and Asia, Phillips is bigger in the U.S. Executives say the merger should add to earnings within a year of the deal closing. Pending shareholder and regulatory approval, that's planned for the second half of next year. Allan Chernoff, CNN Financial News, New York.
Phillips Petroleum and Conoco to Merge