A merger is an amalgamation of two corporations to form one big company. Exxon-Mobil is an example of a merger. Moreover, it is one of the biggest mergers in the American history. Mergers can either be a success or a failure. Exxon-Mobil is one of the successful mergers.
The decision to join the two companies changed the petroleum industry forever. The merger between Exxon and Mobil occurred in 1999, when the two signed an agreement worth $81billion to amalgamate and come up with Exxon-Mobil. The merger had undergone some difficulties, since the Federal Trade Commission did not support the contract. The two units had to sell off some gas stations for the deal to be approved.
This merger was so significant that FTC required an immense restructuring of many of the two companies’ gas stations, in order to shun complete monopolization. In the oil industry, Exxon-Mobil is the strongest corporation that has a huge grasp in the global market and impressive earnings. It is the second largest public company, and it has enjoyed incredible success. In every year after merging, Exxon-Mobil has been having a record of profits; hence their business decision has been a victory.
In terms of shareholder wealth, Exxon share price has risen to a greater extent. By 2008, the merger was among the firms with the largest annual profits in the United States. By 2009, the mergers had increased their reserves of natural gas and oil. The larger number of reserves resulted to an increase in shareholder’s wealth, since it had enhanced the shareholder value.
In conclusion, Exxon-Mobil was a success, since after merging the company was able to achieve its objectives of making substantial profits and also increased the shareholder value. The Exxon-Mobil success is felt worldwide, since the organization serves many countries. In conclusion, the success of a merger depends on how well it has been planned.
About the Author
Nancy Bauman is a financial analyst and accounting expert. She is also an expert on business ethics and is constantly participating in university conferences as a member of the Educated Youth Movement. She regularly contributes articles related to business and loans at advanced-writer.com