Exxon and Mobil Merger—The Market Share Conundrum

question 18

Essay

Exxon and Mobil Merger—The Market Share Conundrum

Following a review of the proposed $81 billion merger in late 1998, the FTC decided to challenge the Exxon–Mobil transaction on anticompetitive grounds. Options available to Exxon and Mobil were to challenge the FTC’s rulings in court, negotiate a settlement, or withdraw the merger plans. Before the merger, Exxon was the largest oil producer in the United States and Mobil was the next largest firm. The combined companies would create the world’s biggest oil company in terms of revenues. Top executives from Exxon Corporation and Mobil Corporation argued that they needed to implement their proposed merger because of the increasingly competitive world oil market. Falling oil prices during much of the late 1990s put a squeeze on oil industry profits. Moreover, giant state-owned oil companies are posing a competitive threat because of their access to huge amounts of capital. To offset these factors, Exxon and Mobil argued that they had to combine to achieve substantial cost savings.

After a year-long review, antitrust officials at the FTC approved the Exxon–Mobil merger after the companies agreed to the largest divestiture in the history of the FTC. The divestiture involved the sale of 15% of their service station network, amounting to 2400 stations. This included about 1220 Mobil stations from Virginia to New Jersey and about 300 in Texas. In addition, about 520 Exxon stations from New York to Maine and about 360 in California were divested. Exxon also agreed to the divestiture of an Exxon refinery in Benecia, California. In entering into the consent decree, the FTC noted that there is considerably greater competition worldwide. This is particularly true in the market for exploration of new reserves. The greatest threat to competition seems to be in the refining and distribution of gasoline.
-How does the FTC define market share?

Describe the concept and application of shoe leather epidemiology in community health.

Understand the challenges and considerations in collecting health information from community residents.

Recognize the importance of support systems and community resources for individuals with chronic illnesses.

Understand the ethical approaches and principles in community health nursing.

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Definitions:

Conversion

is a tort that involves the unauthorized taking or use of someone else's personal property, depriving them of its possession or use.

Trespass to Personal Property

A tort involving the intentional interference with the use or possession of personal property belonging to another.

Unauthorized Use

Utilization of property, resources, or information without permission from the rightful owner or authority.

Tort Elements

Tort Elements are the essential components that must be proven for a tort claim to be successful, including duty, breach, causation, and damages.