WASHINGTON, Dec 31: US authorities said Wednesday they had cleared the 48.2 billion dollar merger between British Petroleum and USbased Amoco on condition that the two companies divest gas stations and light petroleum products terminals, says AFP.

Under the proposed agreement . BP and Amoco would divest 134 gas stations in eight markets and nine light petroleum products terminals, the Federal Trade Commission said.

In addition, the companies would make it easier for independent retail dealers in 30 markets to switch their gas stations to other brands. More than 1,600 gas stations could potentially be affected, the FTC said.

Although the merger of BP and Amoco involves companies of enormous Size, and there is a significant trend toward concentration in the petroleum industry. the operations of these two companies rarely overlap in a way that threatens competition." said FTC Chairman Robert Pitofsky.

"Where they do overlap, mainly in the wholesale and retail sale of gasoline in local markets in this country. The commission with the cooperation of the companies has achieved substantial divestitures and other relief that makes it likely that consumers will enjoy the benefits of competition." he added.

The European Commission gave its approval on December 11 to the merger, on condition that Amoco divests its polyisobutylene operations in Europe, as it has announced it would do.

The marriage of the companies will create the world's third biggest oil company after the Anglo-Dutch group Shell and Exxon of the United States, which has itself announced a merger with Mobil.

' BP. Amoco, as the new entity would be known, would have a market capitalisation of 110 billion dollars and would be headquartered In London.