Unocal: Legal Implications of Acquisition Bids by Chevron Corp. and China National Offshore Oil Corporation (CRS Report for Congress)
| Release Date |
Aug. 16, 2005 |
| Report Number |
RS22192 |
| Report Type |
Report |
| Authors |
Janice E. Rubin and Michael V. Seitzinger, American Law Division |
| Source Agency |
Congressional Research Service |
Summary:
The acquisition of Unocal -- which includes Unocal's wholly owned subsidiary, Union
Oil Co. of
California -- by either Chevron Corporation or the China National Offshore Oil Corp. (CNOOC)
could have been subject to review by either of two U.S. agencies; which agency reviews a
proposed
merger or acquisition depends on the origin of the parties, and the reviews are conducted for
different reasons. Certain mergers or acquisitions between domestic entities may be evaluated under
the Premerger Notification Act by either the Federal Trade Commission (FTC) or the Antitrust
Division of the Department of Justice in order to assess a transaction's likely effect on
competition
within the United States. If the merger partner or acquiring party is a non-U.S. entity, the Committee
on Foreign Investment in the United States (CFIUS) may monitor and evaluate the impact of the
proposed transaction and determine whether the acquisition implicates national security issues. If
the President determines that national security is threatened by the acquisition, he may suspend or
prohibit the acquisition. This report will set out, briefly, the background and conclusion of the
competing bids for Unocal, the mechanics of the review processes, and present some Congressional
reaction to the situation. On August 2, 2005, CNOOC withdrew its bid for Unocal, and on August
10, 2005, Unocal shareholders approved the acquisition by Chevron. This report will not be further
updated.
