The Exxon Mobil-BP Merger Rumor That Just Won’t Go Away
SeekingAlpha.com article byDave Dierking published 15 April 2015
The Exxon Mobil-BP Merger Rumor That Just Won’t Go Away
Summary
- The rumors of the viability of an Exxon Mobil-BP merger surfaced once again recently following the Royal Dutch Shell-BG merger.
- Exxon Mobil could be compelled to make such a transaction due to BP’s relatively inexpensive valuation and the tens of millions of dollars in cost savings a merger would create.
- The potential scope and size of such a merger – the combined entity would be worth close to $500B – make it unlikely to occur.
- Exxon Mobil could be turned off by BP’s outstanding litigation concerns and costs as well as BP’s Russian investment in Rosneft.
Even well before Royal Dutch Shell (NYSE:RDS.A) made a $70 billion bid to buy BG (NYSE:BG), talks of the merger & acquisition market in the energy sector heating up have persisted for months. The Shell-BG merger it’s thought could just be the first domino.
Analysts are keeping an eye on other big name oil companies like Exxon Mobil (NYSE:XOM) and BP (NYSE:BP) as other firms that could be looking to make an acquisition or even combine in a merger themselves. Logically speaking, it would make more sense for the two companies to make acquisitions themselves to fill in holes in their businesses where they might be lacking. As oil prices have plunged, the value of energy stocks have dropped as well and the perception could be that many of these companies are now “on sale” and could fuel this additional M&A discussion.
The TRUTH will set you FREE.
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