Acquisition of Exxon Mobil
Technical report
Acquisition of Exxon Mobil by EIG
Embry Investment Group is an investment company, which deals in investment, primarily through acquisition of other companies. However, before they acquire an organization, they will require evaluating its overall performance to ensure that their investment will attract many investors in the globe. The suggested company to acquire is Exxon Mobil, a renowned public traded organization, which suits the investor's preference. The suggested company conducts its business in over 200 nations in the globe. In addition, Exxon Mobil has upstream activities in numerous countries. Most importantly, Exxon Mobil deals in gas, oil, coal and chemicals, and its portfolio comprises of discovered oil and gas resources equivalent to 70 billion barrels of oil.
Executive Summary
Currently, business in every sector has become competitive, an aspect, which has seen many companies declining without hope of revival. Therefore, many organizations have put in place strategies that will keep them running in the competitive environment, in an attempt to maintain their market value. Additionally, for a company to survive, and prosper in such a competitive environment, it is important for the board of directors, in consultation with their stakeholders to engage in strategic planning or management, which clearly defines its goals and explores both inner and outer situations to develop the most appropriate strategy (Kotler and Zaltman, 1971).
On the other hand, every business has its ultimate objective, which is always to make profits. Some aim to become a global business leader that is why there are investment companies, whose main agenda is merging, or acquiring other companies. Acquisition not only occurs for declining companies, but also for companies doing very well in the market. It is also a strategy, which companies adopt to ensure continuous growth. Exxon Mobil is a company, which is doing very well on the global scale, and owing to its vigorous business activity, which I feel it cannot perform on its own; I recommend it for acquisition by Embry Investment Group.
Notably, there are numerous countries in the globe, which are in the process of developing. In this process, some of them discover valuable minerals such as oil, a mineral in line with Exxon Mobil's products. Although the company has managed to reach a global market, the rate at which minerals are appearing in various state of the globe, makes it impossible for it to uphold or maintain its crucial business activity; meaning it will require some assistance. For this paper, I will evaluate Exxon Mobil Company, to ascertain its performance in the market for recommendation to EMI.
Introduction
Petroleum industries play or contribute substantially to the American economy. In respect to this, ExxonMobil offers over 300, 000 people jobs, and it processes transports almost 40% of the U.S. energy. Most importantly, the company's U.S. cultural traditions is significant in line to the company's choice of environmental arguments and strategy. This is because the national political-based context of the company can partially explain the variations in climate strategy when compared to other oil companies such as shell and BP. Variations in the political context include the public demands for active climate policies, government regulations and stimuli to develop new market opportunities.
In the United States, customers respect and depend on fuels with Exxon Mobil brand, services and lubricants for their domestic use. Globally, consumers respect and depend on brands from Exxon Mobil, for both personal and official use. Testimonies around the world suggest that Mobil is a renowned organization, owing to its performance, advanced technology in fuels, lubricants and their entire services. The company applies science and innovation to discover safer and cleaner ways to provide the energy required by the world. In addition, the company values clean air, water and environment, which explain the dynamic measures they employ to avoid pollution.
Background:
Exxon Mobil is a corporation, which deals in oil and gas exploration, production, supply, transportation and marketing. The company has three divisions, a downstream, upstream and a chemical division. The downstream division deals with marketing, refining and retail operations, whereas...
In addition, it is important to note that the formation of the company was due to a
merger between, Exxon and Mobil, which trace their origin to Standard Oil. The original company, Standard Oil was a
monopoly, and a court order saw to its dissolution, forming distinct oil companies. Exxon Mobil aims to become the world's premier
petroleum and petrochemical company, a mission it objects to keep through achieving exceptional financial and operating results (ExxonMobil, 2013).
After the dissolution of Standard Oil, Exxon was a centralized company with six major divisions. This meant that the corporate headquarters played the roles of making important decisions concerning the corporation. This also required approval from the headquarters concerning investments, which exceeded $1 million. However, after joining Mobil, there were substantial changes, such as diversification. From a regional-based organization, the company managed to embrace eleven global functions, for instance Exxon Mobil exploration among others. Although ExxonMobil has gone international, both Exxon and Mobil constitute other American Companies, originating from the U.S., which follow the
American culture and tradition.
Business operations
The company has the largest proven reserves and largest production in North America. Its primary assets in Europe include extensive interests in the North Sea and in the Asia Pacific, where both are significant contributors to its total production. The company holds upstream interests in
Malaysia, Indonesia and
Australia. Upstream operations in Africa takes place in Algeria, Angola, Cameroon, Chad,
Egypt, Equatorial Guinea, Niger, Nigeria, DRC, and Sao Tome. Some of the primary assets include producing in Nigeria and Equatorial Guinea, whereas there are some underway developments in Angola, Chad and Nigeria. There are other numerous activities, which the company is part of, and this suggests that the company is active in global oil operations (ExxonMobil, 2012).
Evaluation of Product's Future Requirements
Energy is vital to
economic growth, it is apparent that in the future; there will be a need to maintain reliable energy sources, which are affordable because people will continue using them. Additionally, to meet the growing demand of these products, there is a need to develop new energy supplies, safely and in environment friendly manners. The
oil industry continues to appreciate because of the growing population, which in turn increases the demand for energy. In the future, research suggests that the demand for energy will increase by around 35% as the global population increases to around 9 billion people. This is the case for both developed and
developing countries (Skjaerset, 2003).
For the developing countries, the demand for energy will increase to 65% by the year 2040, suggesting expanding economies and prosperity. Meeting the demand for energy with minimal impact is a chief challenge facing ExxonMobil and global societies in the globe. Fortunately, the advancement of technology will play a significant role in ensuring safe development of the once complicated activity of producing energy sources. By the year 2040, the demand for oil and
natural gas will meet approximately 60% of the global energy demand, and most of this supply will come from deepwater fields and less conventional sources including tight oil, oil sands and shale gas. Additionally,
international trade will play an important role in supplying the energy requirements for the globe, which will further create or open doors for new
international partnerships.
Analysis Methodology
The information provided in this paper relies on credible information provided by the company's website. Additionally, the company I recommend provides its annual reports; therefore, made the analysis assignment easy. The evaluations will cover the products, which the company deals in, the
financial performance of the company, which will provide a prospect for the future performance, the pricing and distribution strategies and provide a number of risks that the company may face, or has already faced.
Full Product Line
ExxonMobil offers a portion of the most popular lubricants brands in the globe, known for performance and innovation, respected and depended upon by a large number of consumers and businesses. In addition, the company also offers a wide variety of jet oils, hydraulic fluids, and greases (ExxonMobil, n.d). The lubricants include Mobil 1TM, Mobil Delvac 1TM, industrial lubricants, ExxonMobil Marine lubricants, and ExxonMobil Base Stocks and ExxonMobil Aviation lubricants. The jet oils include Mobil Jet Oil TM, Mobil Jet Oil TM 254, and Mobil Turbo 319 A-2. The hydraulic fluids include Hy Jet TM V, Hy Jet TM IV-Aplus, and Mobil Aero TM HF Series. It also produces a wide range of greases, which include Mobigrease TM 33, Mobigrease TM 28 and Mobil Aviation Grease SHC TM 100 (ExxonMobil, n.d.).
Supporting Data: Financial performance of the company
During the fiscal year ended December 2012, the company reported revenues $482,295.00 million, a slight decrease with 0.85% compared to the year before. The profit used for operation by the company was $78,726.00 million during the fiscal year 2012, which is an increase of 7.47% from the year 2011. In addition, the company recorded a net profit, which amounted to $44,880.00 million during the fiscal year 2012, which suggests an increase of 9.30% compared to the previous…
