Use an example of your choice to discuss how Merger and Acquisition (Corporate restructuring) transformed market, productive and financial performance - Essay Example

Merger and Acquisition: Exxon-Mobil In 1999, two giant oil companies Exxon and Mobil signed a deal that saw them merge and form one company Exxon-Mobil. The two companies that formed the merger were the top two oil companies in the U.S., Exxon being the number one as noted by CNN Money (1999). The deal that was worth 81 billion USD was approved by the government of the United States after the two organizations agreed to dispose of 2,431 of their stations spread across the nation. In a bid to protect consumers from exploitation with the establishment of a monopoly, the Federal Trading Commission demanded the restructuring of the two organizations before they could merge - the reason for the sale of the over 2400 stations (CNN Money 1999).

The merger saw the new organization, Exxon Mobil Corporation become the number one of the supermajors which include U.K.-based BP Amoco, Royal Dutch/Shell and Anglo-Dutch venture, in terms of size (CNN Money 1999). Following the merger, the new organization started to consolidate itself and grow even bigger citing stiffer competition from other countries, the need for more efficiency, and crude price pressures. As a direct result of the merger, the company saves roughly 2.8 billion USD per year and has decided to lay off about 7.

3% of its workforce (roughly 9000 workers). The company also saves in excess of 1.15 billion USD by closing some of their offices, and doing away with business overlap (Corcoran 2010). One year following the merger, the company lay off about 14,000 workers and saved at least 3.8 billion USD before tax. Analysts note that ever since the establishment of the merger, oil prices in the U.S. have been on a steady and constant rise. ExxonMobil today is by far the number one leader in the U.S. oil market (DiMaggio 1999).

Its presence and exploits in the international market are quite notable. The company has been making dramatic revenues in the international market for as long as it was established. In 2008, for example, the company occupied all the ten slots in the “Top Ten Corporate Quarterly Earnings” (DiMaggio 1999). The company makes in excess of 11 billion USD every quarter. ExxonMobil today is one of the largest publicly held corporations in the world; it comes after Walmart in this respect as noted by (DiMaggio 1999).

According to FactSet Research Systems, the Exxon shares have gone up by 85%, far beyond the 21% rise achieved by DJIA (Corcoran 2010). As of 2008, the company boasts of making sales in excess of 459.5 billion USD and a net income of more than 45 billion USD. The organization’s assets rose to roughly 233 billion USD from the 96 billion USD that Exxon alone held before the merger (Corcoran 2010). The company has increased its holding of natural and oil reserves greatly ever since the two separate entities merged.

Furthermore, the production capacity of the organization has greatly risen over the years. Beyond doubt, the merger of Exxon and Mobil to form ExxonMobil was a move in the right direction. The organization so formed has enjoyed a stronger command of the national and international markets making extremely huge profits. The organization has also managed to spend much lower in compensating its smaller workforce even as its production capacity has increased dramatically. References CNN Money 1999, ‘Exxon-Mobil merger done’, viewed April 23, 2014 http://www.

theguardian.com/business/mergers-and-acquisitions Corcoran G. 2010, ‘Exxon-Mobil 12 Years Later: Archetype of a Successful Deal’, viewed April 23, 2014 http://blogs.wsj.com/deals/2010/11/30/exxon-mobil-12-years-later-archetype-of-a-successful-deal/ DiMaggio M. 1999, ‘The Top 10 Best (and Worst) Corporate Mergers of All Time. Or, the Good, the Bad, and the Ugly’, viewed April 23, 2014 http://www.rasmussen.edu/degrees/business/blog/best-and-worst-corporate-mergers/