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Par   •  4 Décembre 2017  •  Étude de cas  •  656 Mots (3 Pages)  •  592 Vues

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BUSINESS LAW

INTRODUCTION

  1. MERGERS
  1. DEFINITION
  2. CASE STUDY EXXON MOBIL

So, know we will see what is a merger through a case study. This one is about the merge of Exxon and Mobil to create Exxon Mobil Corporation. So, they merged in 1999 and it has costs 82 billion dollars. So, there first activity is the exploration of gas, work on petrochemical and on fuels and lubricants.

The aim of this merge was to share the Known-how of each company so combine their know-how.

Also, in a short-run the aim was to realize a synergy of efficiency, so a synergy is the interaction of elements that when combined produce a total effect that is greater than the sum of the individual elements. So, improve their efficiency.

And in a long-run establish a synergy of growth.

Exxon Mobil represents the biggest merger in history and created the world's pre-eminent oil major with revenues of $200bn, 123,000 employees and worldwide production of 2.5 million barrels of oil a day, this is the most profitable of the Western “supermajor” oil companies,

This operation created the world leader in this sector and accelerated the consolidation of the oil industry. This one is one of the best case of merger.

 But to understand it we should understand its constraints. The world oil industry began changing in the 1950s. Rich democracies’ oil production started to peak and easily available oil in poorer countries began being grabbed by governments in a spirit of “resource nationalism”. Western companies were often no longer welcome, or if they were, they were allowed to operate only within tight limits. The oil industry was going through a tough spell. Persistent and historically low oil prices, along with more global competition, was giving companies not an urge, but a need, to merge.  

  in fact, why Exxon decided to merge with Mobil.

  • First, they are going to combine complementary assets, Exxon-Mobil would have a stronger presence in the regions of the world with the highest potential for future oil and gas discoveries. The combined company would also be in a stronger position to invest in programs involving large outlays with high prospective risks and returns.

  •  Secondly, Exxon’s experience in deepwater exploration in West Africa would combine with Mobil’s production and exploration acreage in Nigeria and Equatorial Guinea. In the Caspian region, Exxon’s strong presence in Azerbaijan would combine with Mobil’s similar position in Kazakhstan, including its significant interest in the Tengiz field, and its presence in Turkmenistan. Mobil is strongly presents in Qatar. Mobil retain a strong expertise in liquefied natural gas whereas Exxon lost these competences in this field.

  • Finally, near term operating synergies of $2.8 billion were predicted. Two-thirds of the benefits would come from eliminating duplicate facilities (installations analogues) and excess capacity (capacité excédentaire). It was expected that the combined general and administrative costs would also be reduced. Additional synergy benefits would come from applying each company’s best business practices across their worldwide operations. In a news ExxonMobil reported that synergies had reached $4.6 billion. Analyst reports projected synergies would reach $7 billion by 2002

We can conclude that these two companies are complementary. The Exxon-Mobil combination is an archetype of a successful merger. Fundamentally, the reasons, structures, and implementation of the transaction reflected the characteristics of the oil and gas industry.

 intro: Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations or their operating units are transferred or combined. From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity's stock, equity interests or assets. After giving a detailed definition of fusion and illustrating with examples and case studies, we will proceed to the legal definition of an acquisition. In order to finish our presentation, we will give you different examples of failures of mergers and acquisitions

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