Business & Investment

Exxon, Chevron CEO discusses merger in early 2020-Reuters sources

© Reuters.File Photo-The File Photo combination shows the largest listed oil companies BP, Chevron, Exxon, Mobile Royal Dutch Shell, and a total of five logos.

Mike Specter

(Reuters)-ExxonMobil (NYSE :) Corp and Chevron Corp (NYSE :) said it had preliminary talks in early 2020 to consider the largest merger in history by combining the two largest US oil producers.

The no longer active debate shows the pressure faced by the most dominant companies in the energy sector when the COVID-19 pandemic took hold and oil prices plummeted.

The meeting between Exxon CEO Darren Woods and Chevron CEO Mike Worth was sufficient to draft a legal document on certain aspects of the merger debate, according to one source. It was serious. I didn’t know why the talks were over.

Sources demanded anonymity because the issue was confidential. Exxon and Chevron, whose market capitalizations are $ 190 billion and $ 164 billion, respectively, declined to comment.

Exxon and Chevron stocks plummeted last year after fallout from the Saudi-Russian price war and the outbreak of a new coronavirus caused oil value in the crater. Exxon shares were hit hardest as investors expressed concern about the company’s long-term profitability and spending decisions.

At the meeting, Exxon and Chevron CEOs envisioned achieving synergies through significant cost savings to survive the slump in the energy market, according to one source. As of the end of 2019, Exxon employs approximately 75,000 people and Chevron employs approximately 48,000 people.

Chevron acquired an oil producer after negotiations with Exxon were discontinued Noble Energy (NASDAQ :) $ 5 billion cash and stock trading completed in October.

The combination of Exxon and Chevron would have faced significant hurdles, including antitrust concerns and opposition from corporate rivals. Some U.S. lawmakers, primarily Democrats, have accused Big Oil of contributing to climate change, a top priority of President Joe Biden’s administration.

News emerged that negotiations failed as Exxon was pressured by some shareholders for its strategic direction.

San Francisco-based investment firm No. 1 engine appointed four directors to Exxon’s board last week to increase cash spending, maintain dividends and increase investment in clean energy. I’m urging you. Exxon is also on the cross of hedge fund DE Shaw, which is putting pressure on the company to reduce costs and improve performance.

Exxon will report its fourth quarter results on February 2nd. Chevron reported a staggering $ 11 million loss in the fourth quarter last week as low margins on fuel, acquisition costs and foreign currency effects overwhelmed the improvement in drilling results.

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Exxon, Chevron CEO discusses merger in early 2020-Reuters sources Exxon, Chevron CEO discusses merger in early 2020-Reuters sources

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