Mr Peter Sutherland is to become co-chairman of the world's third largest oil company following the link-up of BP and the US giant Amoco in the world's largest industrial merger.
News of the agreed takeover of Amoco by BP took the stock markets by surprise yesterday. The two companies are to join forces in a $110 billion deal.
Mr Sutherland's appointment comes a day after he secured his position among Ireland's growing ranks of multi-millionaires with confirmation of the decision of Goldman Sachs, the US merchant bank, to float on Wall Street this autumn.
Mr Sutherland, who is chairman and managing director of Goldman Sachs International, stands to gain as much as $100 million (£71 million) from the flotation.
The new oil company will trade as BP/Amoco plc, incorporating oil, gas and chemical operations spanning the globe. BP's chief executive, Sir John Browne, will head the new company, while Mr Sutherland and Amoco's chairman, Mr Larry Fuller, will cochair the board of directors. Mr Fuller is due to retire in 2000.
Mr Sutherland, a former Attorney General and EU Commissioner, joined the board of BP in 1989, serving as a director until 1993, when he resigned to become director-general of GATT (General Agreement on Tariffs and Trade). He rejoined the BP board as deputy chairman in July 1995 and has been chairman since 1997. As chairman of BP, Mr Sutherland received director's fees of £132,000 sterling (£152,600) in 1997, together with share options.
Mr Sutherland is one of Ireland's most prominent businessmen, also holding directorships of Ericsson and Delta Air Lines.
BP will dominate the new industrial colossus, holding 60 per cent of the stock and supplying six out of eight executive directors. The company will have its headquarters in London, becoming Britain's largest company.
The merger announcement sent tremors through the international oil industry. BP/Amoco will have a market capitalisation of $110 billion and 100,000 employees worldwide. However, about 6,000 jobs are expected to be lost as a result of the deal.
BP shares initially soared on the news, but fell back to close up 22p at 795p sterling. Amoco shares immediately rose when Wall Street opened.
Executives of the two companies say their combined operation will eventually have the financial scale and global reach to challenge Royal Dutch/Shell and US giant Exxon for leadership of the international oil industry.
Although it was clear that BP would be the dominant partner, Sir John Browne said: "The deal was done on both sides from a position of strength." The agreed equity split will be 60 per cent to BP shareholders and 40 per cent to Amoco's. The deal values Amoco shares at a premium of 15 per cent on Monday's closing price. The companies will seek shareholder approval by October or November and aim to close the deal by the end of this year.
Mr Fuller said he doubted whether a counter-bidder would emerge for Amoco, as the BP offer was "sufficiently strong". Sir John said that BP had already taken steps to avert any battle for Amoco. In the event of a counterbidder emerging, it has the right to buy 19.9 per cent of Amoco's shares at a pre-announcement price. Amoco would also have to pay BP a $1 billion fee if the deal failed to go through.
The takeover marks an end to a long period of stability among the western world's largest oil companies. Although there has been growing talk of the need for consolidation in the sector - especially in the light of this year's oil price slump - few industry observers expected any early action.