317. Telegram From the Department of State to the Embassy in the United Kingdom1
170292. For Ambassador Annenberg from the Secretary.
1. Please deliver following letter to Foreign Secretary Stewart for me:
“Dear Michael, I have asked Ambassador Annenberg to deliver this response to your letter of September 20 so as to underscore the serious attention we have given the BP/Sohio merger.2
“As a result of your letter and Ambassador Freeman’s discussions here, my staff has been in close and continuous contact with the Department of Justice. The Justice people, I am satisfied, have done everything possible to try to reconcile the terms of the proposed merger with existing anti-trust guidelines. A final effort to this end was made in a meeting on October 3 with representatives of British Petroleum and Sohio. Unfortunately, the parties did not come to an agreement.
“I wish to assure you, in view of the great importance Her Majesty’s Government attaches to this matter, that the Department of Jus[Page 967]tice has approached the merger proposal with sympathetic deliberation and complete fairness. I am fully satisfied that BP is receiving, and will continue to receive, equitable treatment in this matter.
“As a matter of fact, the Department of Justice is not seeking a court injunction to prevent the merger. It has instead stated its intention to sue to have the acquisition declared illegal, and discussions will continue in an effort to arrive at a satisfactory disposition of the matter.
“I hope you will appreciate that we have done as much as we could reasonably do, consistent with the government’s responsibilities under the anti-trust laws, to obtain the desired resolution of this matter.
“We, as you, are cognizant of the desirability of maintaining a hospitable climate for international investment. We have welcomed British investment here and see more of it every day. The anti-trust issue unfortunately makes the current question an exceptional one.
“With best regards, sincerely, Bill”.
2. I would appreciate your supplementing the message conveyed in my letter with oral comments along the lines of the Under Secretary’s telegram to you.
3. There follows text of “personal and confidential” letter dated September 20 in New York from Foreign Secretary Stewart to me:
“Dear Bill, there is one point that I should have liked to have raised this afternoon3 had we had time and which I believe may be a little too pressing to wait for our meeting next Tuesday. This is the question of the BP/Sohio merger. Ambassador Freeman was sympathetically received when he spoke to Mr. Elliot Richardson on 11 September about the merger.4 This is a complicated matter and I do not want to trouble you with the details which are available in the State Department. I should merely like to say that it is a matter to which we attach the greatest importance and I hope that it will be possible for the administration to adopt a helpful attitude.
“With best wishes, yours, Michael.”5
- Source: National Archives, Nixon Presidential Materials, NSC Files, Box 726, Country Files—Europe, United Kingdom, Vol. II. Confidential; Immediate; Exdis. Drafted in EUR; cleared in S/S, E, and EUR; and approved by Rogers.↩
- In telegram 7931 from London, October 2, Annenberg stated: “I am deeply concerned about foreign policy impact and political effect here and elsewhere in Europe of possible Department of Justice action to forestall BP–Sohio merger.” He added: “The interest with which this matter is being watched by the British should not rpt not be underestimated. There is danger of real damage to the climate of international trade and investment.” (Ibid.)↩
- A memorandum of conversation is in the National Archives, RG 59, Executive Secretariat, Conference Files, 1949–72, CF 396.↩
- A memorandum of conversation is ibid., Central Files 1967–69, PET 6 UK.↩
- In telegram 8138 from London, October 8, Annenberg reported that he had delivered Rogers’s message to Stewart: “We both shared the hope that a resolution of the problem could be achieved in an equitable fashion and that this problem would not mar Anglo-U.S. relations.” Annenburg noted that Stewart “realized that the initiative lies with BP, that the problem would have to be resolved in the United States.” (Ibid., Nixon Presidential Materials, NSC Files, Box 726, Country Files—Europe, United Kingdom, Vol. II) After negotiations between BP and the Department of Justice, a settlement was reached on December 2 that permitted BP to acquire Sohio. Documentation on the negotiations and settlement is ibid., RG 59, Central Files 1967–69, PET 6 UK and ibid., PET 6 US.↩