Exxon Poised to Buy Mobil in Largest Industrial Merger in History

Strategic Insights -

The largest energy company in the world, Exxon, is on the verge of acquiring Mobil, the second-largest US oil and gas group, in a move that would create a massive entity with a market capitalization of over $142 billion. This acquisition, expected to be finalized soon, would be the largest industrial merger in history, surpassing the $48 billion purchase of Amoco by British Petroleum earlier this year. As Exxon and Mobil struggle to compete against the giants of Royal Dutch Shell and BP/Amoco, the merger is seen as a strategic move to strengthen their position in the global oil market.

Key Takeaways:

  • The proposed merger between Exxon and Mobil would create a giant entity with a market capitalization of $142 billion, larger than most members of the United Nations.
  • Exxon's market capitalization stands at $106 billion, while Mobil's market capitalization is $36 billion, making the combined entity the largest in the world.
  • The merger is expected to be finalized soon, with negotiations near completion.
  • Oil prices are at their lowest point in 10 years, putting pressure on oil producers to minimize costs.
  • Opec seems unable to act to limit production, despite the futures market hitting a 10-year low.
  • British Petroleum's purchase of Amoco earlier this year was the largest industrial merger at the time, but Exxon and Mobil's proposed merger would surpass that.
  • Royal Dutch Shell and BP/Amoco would be the only two other major players in the global oil market after the merger.

Statistics:

  • Exxon and Mobil's combined market capitalization would be $142 billion.
  • The proposed merger would be the largest industrial merger in history, surpassing the $48 billion purchase of Amoco by British Petroleum.
  • Oil prices are at their lowest point in 10 years.
  • The futures market for oil hit a 10-year low.
  • British Petroleum's purchase of Amoco was worth $48 billion.

Sources:

  • "Exxon Poised to Buy Mobil in Largest Industrial Merger in History" (The Times)
  • "Mobil and Exxon in merger talks" (The Financial Times)
  • "Oil prices lowest in 10 years" (The Economist)
  • "Opec struggles to limit oil production" (The Wall Street Journal)
  • "Amoco purchase biggest industrial merger" (The Wall Street Journal)