PITTSBURGH -- Standard Oil Co. of California Monday agreed to buy Gulf Oil Corp. for $13.2 billion, or $80 per share, in what would be the largest takeover in U.S. corporate history.
The merger is aimed at saving Pittsburgh-based Gulf from a hostile bid by Texas oilman T. Boone Pickens, its largest shareholder.
Gulf, the nation's sixth-largest oil company, said the boards of directors of both companies approved the agreement. The plan calls for Gulf to be merged into a subsidiary of fifth-ranked Socal.
The takeover would create the nation's third-largest oil firm, behind Exxon Corp. and Mobil Corp., and could raise antitrust objections by the Federal Trade Commission, industry sources said.
The offer came after a day-long meeting of Gulf's board of directors, Gulf Chairman James E. Lee and Socal Chairman George M. Keller, a Gulf spokesman said.
Gulf said a cash tender offer for all its outstanding stock will begin shortly, but Socal is not obligated to complete the deal unless it can buy 85 million shares, or 51 percent of outstanding stock.
Socal also has an option to buy 30.5 million shares of Gulf's 35 million unissued treasury shares, a Gulf spokesman said.
Gulf launched a search for a so-called 'white knight' after a dissident investment group led by Pickens made an unfriendly $65-per-share tender offer for 8.2 percent of Gulf's stock.
Pickens, chairman of Mesa Petroleum Co. of Amarillo, Texas, and his fellow investors rank as Gulf's largest shareholders, with a 13.2 percent stake.
Los Angeles-based Atlantic Richfield Co. had been ready to bid between $78 and $80 per share for Gulf's 165 million shares, industry sources said.
Allied Corp. of Morristown, N.J., was also considered a possible bidder for Gulf.
About a dozen prospective suitors had examined Gulf's internal financial data and more than half signed a pact agreeing not to seek control of the company for three years without Gulf's consent, industry sources said.
Kuwait's state-owned petroleum company also reportedly had expressed interest in buying Gulf's U.S. gasoline marketing network.
The nation's largest merger so far is Texaco Inc.'s recent $10.1 billion acquisition of Getty Oil Co.
Gulf's feud with Pickens dates back to last fall, when it fought and won one of the biggest proxy battles in history over a corporate reorganization aimed at keeping the maverick Texan off the board of directors.