ChevronTexaco to Buy Unocal in $16.4B Deal

AP saysChevronTexaco to Buy Unocal in $16.4B Deal.

Unocal has been considered an attractive takeover target for years, largely because of its valuable cache of oil and natural gas in the Gulf of Mexico and the Asia Pacific. The company reportedly drew interest from the China National Offshore Oil Corp., a large state-owned company, and Italian oil company Eni SpA before settling on a sale to ChevronTexaco.

While the Gulf of Mexico supply would cater to North America, Unocal's pool of Asian assets could be parlayed to capitalize on the increasing thirst for oil in China and India.

In a conference call with analysts Monday, ChevronTexaco Chairman David O'Reilly predicted Unocal would "fit like a glove" with his company.

Sounds good to me, especially, given the global nature of the business now, bigger probably is better if you are going to compete with national oil companies.