Exxon-Mobil merger sealed

Exxon-Mobil merger sealed

Low oil prices continued to force consolidation in the industry last December as oil giants Exxon and Mobil agreed a $75bn merger deal – the world`s largest. The newly formed company, to be known as Exxon Mobil, will be the world`s largest company in revenue terms.

In a similar deal in Europe, Total of France announced that it is to take over PetroFina of Belgium. This move will create one of the six largest oil companies in the world, and Europe`s third largest in production and revenue terms. The new company, Total Fina, will have a market capitalization of nearly $40bn.

The Exxon-Mobil deal is essentially a takeover of Mobil by the larger Exxon. Exxon will pay $75bn in stock to form the new company, which will have revenues totalling $203bn. The two companies envisage near-term cost savings of $2.8bn and around 9000 job losses.

Consolidation in the oil industry, which began last August with BP`s takeover of Amoco, has been caused by the continuing 25-year low in world oil prices and low demand in regions such as Asia. The BP-Amoco merger cleared the last regulatory hurdle in late December when US antitrust regulators gave the deal the green light.

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