Exxon Deal Takes World by Storm
by Tushar Mathur - December 16th, 2009. Filed under: Acquisitions.December, the festive month of Christmas began with a big bang. The markets were surprised by the announcement by Exxon (XOM) to buy out Energy (XTO) for a huge $41 billion.
This merger of Exxon Mobil Corporation with XTO Energy will strengthen Exxon’s position in the field of developing oil and natural gas resources.
The financial implication of this deal on the shareholders of XTO is that for every share of XTO, will get 0.7098 share of XTO, which is about 25% more in value. This is kind of Christmas gift to the shareholders of XTO. The figure of $41 billion is arrived at taking into consideration the debts of XTO worth $10 billion.
The merger will benefit Exxon too. The greatest of strengths of XTO lies in its expertise in the technical field as well as its resource base. XTO has some of the best skilled employees on its pay roll.
Exxon Mobil prides on its strength of highly motivated and advanced R&D, financial strength, its strong presence in the global market along with its operational abilities.
When two stalwarts of business has decided to marry, this will be a marriage of two minds for the customers based in United States as well as across the globe, as the fruits of increased capacities of gas and oil resources would be available to all the customers.
This is good news for the market too, as it will give much needed impetus to the staggering US economy and increase the scope of job opportunities in the United States. It will also increase the investment of the US in clean gas resources.
ExxonMobil has global presence in several countries such as Canada, Poland, Germany, Argentina and Hungary in addition to United States. When XTO’s resources of tight case, shale gas, shale oil and coal bed methane totaling to around 45 trillion cubit feet will be added to the existing capacity of ExxonMobil and make it a global giant in natural gas resources.
It is expected that the legal and financial procedures related to the merger will be completed by the second quarter of the year 2010.