Disney, Sirius Radio, And Exxonmobil Merger

Over the past few decades, corporations have found that restructuring is one of the good methods for economic survival and expansion. One way of restructuring a corporation would be through merger and acquisition, namely consolidate its business operation with other corporations (Gaughan 2005). Mergers and acquisitions act as an important tool for the growth and expansion of the economy. The underlying rationale of mergers and acquisition is to realize the one plus one is bigger than two effect, which has been mostly taken advantage of at tough times to achieve greater market share and cost efficiency. (Smith 2012). We have seen many examples of companies, such as Disney, Sirius radio, and ExxonMobil, to create dramatic revenue growth through

On November 30, 1998, Exxon and Mobil agreed to merge together with an agreement involving a total value of approximately $73.7 billion and completed it at the end of 1999. The motivation for this merger is to help both companies to better tackle oil and gas price instability and to win the global competition of market share. The merger boost ExxonMobil’s revenue from $7,910 million in 1999 to $17,720 million in 2000, and assets increased from $144 billion in 1999 to $149 billion in 2000. Besides the assets and earnings increase, Exxon’s deep water experience and development has combined perfectly with Mobil’s research and development on the production and exploration (Western 2002). The advantages of the two companies made ExxonMobil a more complete company that will not fall short in any area of expertise. The merger was so successful that even in the global economic downturn in 2008, ExxonMobil reported revenue of $459.58 billion and net income of $45.22 billion, which was one of the most profitable corporations in U.S. history (Corcoran 2010). If its revenues were to become GDP, ExxonMobil would rank 21st in the world’s most wealthy countries (Coll