Merger Analysis Paper
Exxon Mobil Corporation, formerly named Exxon Corporation, was incorporated in the State of New Jersey in 1882. On November 30, 1999, Mobil Corporation became a wholly-owned subsidiary of Exxon Corporation, and Exxon changed its name to ExxonMobil Corporation. ExxonMobil Corporation has several divisions and hundreds of affiliates, many with names that include ExxonMobil, Exxon, Esso or Mobil. ExxonMobil is the one of world's largest integrated oil company. Exxon Mobil engages in oil and gas exploration, production, supply, transportation, and marketing around the world. It has proved reserves of 21.2 billion barrels of oil equivalent. ExxonMobil's 45 refineries in 25 countries have a capacity of producing 6.3 million barrels per day. The company supplies refined products to 42,000 service stations in more than 100 countries that operate under the Exxon, Esso, and Mobil brands (including more than 16,000 in the US). Exxon Mobil is also a major petrochemical producer.
The 1999 marriage of the two companies was facilitated for very different market and industry pressures than what the oil industry faces today. In the late 90’s companies in the oil industry and other sectors faced what many experts called “a new global crisis” in which excess oil capacity along with technological and other changes in the industry have turned the traditional oil business model on its head. Where prices could once be based on costs and passed on to consumers, companies were increasingly slashing their costs to meet falling price targets. This situation being a stark contrast to what the world is seeing today. With the need to slash costs while also looking to increase revenue, Exxon was left looking for a way to increase th...
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...ately the increased value and maximized earnings is the motive and perceived strategy established by Exxon Mobile through the Horizontal merger. Exxon Mobile Corporation was able to accomplish this by reaching a larger geographical area and becoming a bigger threat to other oil competitors.
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When John D. Rockefeller merged with the railroad companies, he had gained control of a strategic transportation route that no other companies would be able to use. Rockefeller would then be able to force the hand on the railroads and was granted a rebate on his shipments of oil. This was a kind of secret agreement between the two industries. None of the competition knew what the rates were for the rebates or the rates that Rockefeller was paying the railroad. This made it hard for the competition to keep up with the Standard Oil Company. The consequences led to many oil companies getting bought out by Rockefeller secretly. All in all, 25 co...
Exxon Mobile (NYSE: XOM) didn’t have a good start for the year, but the fourth-quarter results helped the company’s share to rise nearly 7% despite not so exciting financial performance. Its shares are now up approximately 3% since year-to-date. The company for the quarter reported earnings of $0.67 per share, a slump of 57% as compared to earnings of $1.56 per share in the fourth-quarter of 2014.
One of these factors was the logistical nightmare of redeveloping the infrastructure needed to transport oil to the refinery. As early as 1881, Standard oil operated approximately 3,000 miles of pipelines, eventually owning ninety percent of the nation’s pipelines. Although transcontinental railroads were an available alternative, pipelines were cheaper, reduced handling and storage fees, and were more efficient. The fact that modern oil companies invest hundreds of millions of dollars into speculating for sustainable natural oil deposits implies that such deposits are rare and hard to identify with a passing glance. If the spurts of oil proved to be isolated incidents, the capital invested in building pipelines and reestablishing a monopoly would have been squandered.
In terms of Equity Financing strategies, Exxon is implementing a continuous stock repurchase program rather than equity financing. In the first half of 2007, Exxon’s gross share purchases were worth $16 billion, reducing the shares outstanding by 3.2 percent. In 2006, Exxon Mobil paid out 1.77 percent of its stock price in dividends, about equal to the dividend yield for the entire S&P 500. Factoring in the $29.6 billion Exxon Mobil spent on buybacks that year, its yield jumps to 8.64 percent. Public companies share the wealth with investors mainly through dividends and stock buybacks, and both actions have historically benefited investor returns. Since both types of yield signify added value to shareholders, investors should be able to improve their odds in the market by harnessing the power of both statistics. Buybacks benefit shareholders by reducing the amount of stock, giving each remaining share a bigger slice of a company's earnings. Although U.S. policymakers claim that the company does not invest enough in new pumping capacity and spends too much on share buybacks, CEO Rex Tillerson reports that company disagrees with claims.
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The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
This report aims to evaluate how M&S applies the expectations and requirements of corporate governance based on their recent annual report, review of composition of...
This report gives the brief overview of the concept of corporate governance, its evolution and its significance in the corporate sector. The report highlights various key issues and concerns that are faced by the organizations while effectively implementing and promoting Corporate Governance.
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Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.
Furthermore met more than 60% of worldwide vitality request by the oil and gas industry. Advancement undertakings and foundation as far and wide as possible, depend on the business. The oil and gas industry is a basic industry globally. The business might be isolated into five parts:
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