The Exxon-Mobil Merger: An Archetype
Year: 2001
Type: preprint
Abstract: In response to change pressures, the oil industry has engaged in multiple adjustment processes. The nine major oil mergers from 1998 to 2001 sought to improve efficiency so that, at oil prices as low as $11 to $12 per barrel, investments could earn their cost of capital. The Exxon-Mobil combination is analyzed to provide a general methodology for merger evaluation. The analysis includes: the industry characteristics, the reasons for the merger, the nature of the deal terms, discounted cash flow (DCF) spreadsheet valuation models, DCF formula valuation models, valuation sensitivity analysis, the value consequences of the merger, antitrust and competitive reaction patterns, and the implications of the clinical study for merger theory.
Source: SSRN Electronic Journal
Author: J. Fred Weston
Institution: University of California, Los Angeles
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W150821025