Oilman engineered huge takeover

Subject: Oilman engineered huge takeover Fri Oct 24, 2008 7:20 pm

GEORGE Keller, who as head of Standard Oil of California made business history in 1984 by taking over another huge oil company in an unprecedented $US13 billion buyout that he characterised as a "bet-your-company deal", has died following surgery in California at 84.

Keller trained as a chemical engineer and rose through the ranks of Standard Oil of California to become the company's chairman in 1981. Three years later he put up more than $US13 billion to buy Gulf Oil — then the largest corporate takeover in history.

Later, Standard Oil became Chevron, one of the largest industrial enterprises in the world, with 59,000 employees.

Keller's bold acquisition came as company survival and growth required new oil fields, or new ways of exploiting old ones, or buy-outs of oil fields controlled by others.

He had been regarded as an apostle of what Fortune magazine called in 1984 the "old-fashioned way" — searching for untapped sources. Later, however, he was said to recognise a need for major consolidation.

At the time Gulf, headed by James Lee, was increasingly beleaguered by a hostile takeover bid by Texas oilman T. Boone Pickens.

Keller explained his company's actions this way: "The main thing that made us decide to try the acquisition was that I got a call from Jimmy Lee saying 'Help'!" Gulf was one of the brotherhood of giant oil producers, so Keller "felt he had to step in".

The night before he was to make his presentation, Keller settled on an offer of $US79 a share. But in the morning, just before going in to see the Gulf directors, he raised it by a dollar to $80. That added dollar provided the margin of victory.

The takeover allowed Chevron to double its crude oil reserves and immediately made it the third largest oil company, after Exxon and Mobil. Chevron now calls itself the second largest integrated energy company in the United States.

Keller grew up in Chicago, served in the air force during World War II and graduated from the Massachusetts Institute of Technology. After joining Standard Oil in 1948, he worked as a refinery designer and became an assistant vice-president in 1968. He became chairman in 1981. He retired at the end of 1988.

His wife of 61 years, Adelaide, died last year. Survivors include three sons, Bob, Barry and Bill. The last is executive editor of The New York Times.

LNK

Oilman engineered huge takeover

Oilman engineered huge takeover

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