Introduction to Merger and Acquisition

Added on - 28 May 2020

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Running head: MERGER AND ACQUISITIONMERGER AND ACQUISITIONName of the Student:Name of the University:Author’s Note:
1MERGER AND ACQUISTIONTable of ContentsQuestion 1..................................................................................................................................2Question 2..................................................................................................................................2Question 3..................................................................................................................................3Reference....................................................................................................................................4
2MERGER AND ACQUISTIONQuestion 1Merger refers to the joining of two companies which may be due to various reasonssuch as obtaining more market shares, widening the scope of operations of the company or toincrease profitability of the company (Risberg and Annette). In the case of Exxon Mobilmerger which took place in 1998 for US$73.7 billion. The company became the third largestcompany in the world and the largest oil company. This was then recognised as the thirdlargest merger of that corporate time. The merger was done for reasons so that the companycan tackle the fluctuations in oil prices and diversification into other unrelated areas wasunsuccessful. A lot of mergers took place at that time in order to counter the fluctuations ofprices (Weber, Yaakov, and Shlomo Yedidia Tarba). Another reason for the merger was thatthe two top companies can join hands and become the leader of oil Industry and eliminatewhatever competitions that was there. Exxon Mobil merger took place after the merger ofBritish Petroleum and Amoco. The merger actually resulted in Exxon acquiring the businessof Mobil and the shareholders of Mobil were given for 30% in the new company and theshareholders of the Exxon were to get around.Question 2The merger transaction took place in 1998 Exxon and Mobil companies signed a US$73.7 billion agreement. Exxon Company was engaged in energy business and was the largestenergy company at that time whereas Mobil was into gas and oil exploration business and thecompany was second largest at that time. The merger took place in order to tackle thefluctuation of oil prices and the demand for energy in various sectors (Gomeset al.). Anotherreason for the merger was to establish a new stronger company which can face theircompetitors together. The company also wanted to ensure that the merged company together
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