The Exxon - Mobil Merger Controversy
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"This merger will enhance our ability to be an effective global competitor in a volatile world economy, and in an industry that is more and more competitive." 1
- Joint Statement by Lee Raymond and Lou Noto, Chairmen & CEOs of Exxon and Mobil.
"We're talking about putting back together Standard Oil, which was broken up 90 years ago. Consumers are eventually going to pay the price for this since it induces non-competitive behavior. It's bad public policy. The lax treatment of mergers, with the government just winking at this, empowers such corporate consolidation." 2
- Wenona Hauter, Director, Public Citizen's Critical Mass Energy Project.
The two biggest oil companies in the US - the Exxon Corporation (Exxon) and Mobil Corporation (Mobil) announced their merger on December 1, 1998. Exxon announced its decision to acquire Mobil for approximately $76.2 billion (bn) in stock, in the biggest ever deal in the history of the oil industry.
As the merger involved the top two companies in the US, it was closely examined by the Federal Trade Commission (FTC)5 to check whether it breached American anti-trust laws on monopolies. After a thorough and exhaustive review, the FTC approved the merger after the duo agreed to comply with the terms and conditions specified by the FTC (Refer Exhibit II).
1] 'Oil merger faces monopoly probe,' BBC Online Network, December 02, 1998.
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