The Impact Of Merger Of Exxon & Mobil

 

The issue faced by the oil giants Exxon and Mobil, at the time of their merger, was how to sustain their revenue and profitability. The problem arose because the oil prices were continually falling. It was not just Exxon who tackled trouble; it was the entire oil industry.

Merger Of Exxon & Mobil

By merging, the impact was three-fold:
• The pressure of crude oil prices lessened.
• Their efficiency increased.
• They could face international competitive threats better.
The merger of the two firms predicted that as much as $2.8 billion would be saved per year. It meant by merging into one entity both the standalone corporations would gain many benefits. The strategy that Exxon Mobil (the merged entity) followed for better margins and profit were:
• The cash operating costs of the combined business were reduced by $1.2 billion.
• The sales of assets yielded $4-$5 billion.
• The staffing requirement of Exxon Mobil dropped by 16000 people. Even before the merger was finished, about 2000 employees were reduced.
• They captured the full market price of their assets as acknowledged by the controllers for divestment.
When it comes to corporate social responsibility, the impact of Exxon Mobil is almost nil. The company and the two entities before the merger do not have a CSR policy. Their only take is that they do their job well, which offers the greatest good to society and their job is to provide gas and fuel. Furthermore, they do so at competitive prices while moving forward in a safe and environmentally responsible manner
This has sparked a lot of debate, especially in recent years where the havoc of climate change has become glaringly obvious. The consumer, at large, now takes the impact of the merger of Exxon and Mobil as a hidden devil. The union created a stronghold that is ravaging the planet and shows no sign of abating.

Reply

Skip to toolbar