Chevron, the USA’s second largest oil company, is to purchase Texaco in a deal worth $35 billion. A formal announcement is expected today.

The move, approved yesterday by the boards of both companies, will create the fifth largest oil firm in the world, with a market capitalisation of up to $90bn.

However, up to 4000 jobs are at risk, as the combined companies target cost savings of $1.2bn.

The US regulatory authorities may take a keen interest in the takeover, as it further reduces competition in the oil market. Oil prices are currently a controversial issue across the world.

News source: BBC Online Business News (UK)