** STOCK EXCHANGE RELEASE **
Royal Dutch Petroleum Company
and
The "Shell" Transport and Trading Company, p.l.c.
SHELL OIL COMPANY ANNOUNCES $1.8 BILLION ACQUISITION OF PENNZOIL-QUAKER STATE
COMPANY
Shell Oil Company, a wholly-owned member of the Royal Dutch / Shell Group and
Pennzoil-Quaker State Company (NYSE: PZL) today announced that they have
entered into a definitive agreement under which Shell Oil Company will acquire
Pennzoil-Quaker State Company at a price of $22.00 per share in cash.
Under the proposed transaction, which was approved by the board of directors
of Pennzoil-Quaker State Company, Shell Oil Company will acquire
Pennzoil-Quaker State Company through a cash merger. Based on Pennzoil-Quaker
State Company's outstanding shares on a fully diluted basis, the transaction
has a total equity value of approximately US$ 1.8 billion. Shell Oil Company
will also assume Pennzoil-Quaker State Company's outstanding debt (Net book
debt end 2001 = $1.1bln). Completion of the transaction is subject to approval
by Pennzoil-Quaker State Company stockholders and customary reviews by
regulatory agencies in the United States and other relevant jurisdictions.
Phillip Watts, Chairman of the Committee of Managing Directors of the Royal
Dutch / Shell Group of Companies, commenting on the acquisition, said: "This
acquisition is part of our continuing efforts to upgrade our portfolio, and it
also makes an early contribution to Group earnings and cash flow. This is an
important move in the implementation of our Group strategy, which we
communicated in December 2001, with deals of this type building excellent
platforms for earnings growth into the future."
Paul Skinner, Group Managing Director and Chief Executive Officer of the
Group's Oil Products business said: "This transaction, along with our
previously announced transactions in Germany with RWE DEA and in the US
regarding Texaco's former interests in Equilon and Motiva, marks another
important step in extending our sustained downstream leadership outside the US
into a global position."
"The addition of Pennzoil(R) and Quaker State(R), the number one and two
brands in the key US passenger car motor oil segment, is a step change to our
US lubricants portfolio and will ultimately more than replace our use of the
Havoline(R) brand and complement Shell's brand strength in diesel engine
lubricants. We see a great strategic fit between Shell's networks and
infrastructure and Pennzoil-Quaker State Company's leading motor oil brands
and portfolio of other businesses, such as its car care brands and its large
network of over 2000 Jiffy Lube(R) stores."
It is expected that the transaction will be completed in the second half of
2002 and be accretive to Shell's earnings and cash flow from the first full
year after completion. Shell expects that the acquisition will generate
pre-tax benefits of approximately $140 million per annum by 2004. Transaction
and implementation costs are estimated by Shell at $100 million.
IMPORTANT LEGAL INFORMATION: Investors and security holders are urged to read
the proxy statement regarding the proposed transaction when it becomes
available because it will contain important information. The proxy statement
will be filed with the U.S. Securities and Exchange Commission by
Pennzoil-Quaker State Company and security holders may obtain a free copy of
the proxy statement when it becomes available, and other documents filed with
the SEC by Pennzoil-Quaker State Company, at the SEC's web site at
www.sec.gov. The proxy statement, and other documents filed with the SEC by
Pennzoil-Quaker State Company, may also be obtained for free by directing a
request to Pennzoil-Quaker State Company at 700 Milam, Houston, Texas, 77002.
Investors may obtain a detailed list of names, affiliations and interests of
participants in the solicitation of proxies of Pennzoil-Quaker State Company
's stockholders to approve the transaction at the following address: 700
Milam, Houston, Texas 77002.
This document has been approved solely for the purposes of section 21
Financial Services and Markets Act 2000 by Salomon Brothers International
Limited, trading as
Schroder Salomon Smith Barney of Citigroup Centre, 33
Canada Square, Canary Wharf, London E14 5LB. Schroder Salomon Smith Barney is
acting for Shell Oil Company and no one else in connection with the
transaction and will not be responsible to any other person for providing the
protections afforded to clients of Schroder Salomon Smith Barney or for
providing advice in relation to the transaction.
CAUTION CONCERNING FORWARDING-LOOKING STATEMENTS: This press release contains
certain "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations and are naturally subject to uncertainty and
changes in circumstances. Actual results may vary materially from the
expectations contained herein. The forward-looking statements contained herein
include statements about the proposed transaction, future financial and
operating results and benefits of the pending merger. The following factors,
among others, could cause actual results to differ materially from those
described herein: failure to obtain certain regulatory approvals; actions of
the U.S., foreign and local governments; failure of the requisite number of
Pennzoil-Quaker State Company stockholders to approve the proposed
transaction; the inability to successfully integrate the businesses of Shell
Oil Company and Pennzoil-Quaker State Company; the costs related to the
merger; the inability to achieve cost-cutting synergies resulting from the
merger; changing consumer or marketplace trends; the general economic
environment; potential or actual litigation challenging the proposed
transaction; and other economic, business, competitive and/or regulatory
factors affecting businesses generally. More detailed information about
certain risk factors is set forth in the Form 20-F filed by Royal Dutch
Petroleum Company and The Shell Transport and Trading Company and the Form
10-K filed by Pennzoil-Quaker State Company, and other documents filed with or
furnished to the SEC by Royal Dutch Petroleum Company and The Shell Transport
and Trading Company and Pennzoil-Quaker State Company. None of Shell Oil
Company, Royal Dutch Petroleum Company and The Shell Transport and Trading
Company and Pennzoil-Quaker State Company is under any obligation to (and each
expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information, future
events or otherwise.
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Investor relations enquiries:
Bart Van der Steenstraten (Netherlands) +31 70 377 3996
Mike Harrop (UK) +44 207 934 6287
David Sexton (USA) +1 212 218 3112