ExxonMobil Merger: A Case Study of a Major Horizontal Merger in the Oil Industry

2014
Horizontal Mergers:
Exxon/Mobil
INDUSTRIAL ORGANIZATION
CARLOS GONZLEZ
UNIVERSIDAD AUTNOMA DE MADRID |
Horizontal Mergers: Exxon/Mobil
Universidad Autnoma de Madrid

Facultad de Ciencias Econmicas y Empresariales
International Economy
Industrial Organization
Ciudad Universitaria de Cantoblanco, 28049 Madrid
http://www.uam.es/ss/Satellite/Economicas/es/home
carlos.gonzalezalvarez@estudiante.uam.es
1. Index
Abstract ............................................................................................................................ 3
1.
Introduction............................................................................................................... 4
2.
Background................................................................................................................ 6
3.
The Merger ................................................................................................................ 9
4.
Economic Implications ............................................................................................ 13
5.
Results of the Union ................................................................................................ 22
6.
Conclusion ............................................................................................................... 24
References ...................................................................................................................... 25
Appendix ......................................................................................................................... 27
Abstract
Regarding the market system, economic theory has designed how the general
framework should be structured seeking the best welfare outcome possible. For this,
the goal is to reach conditions of competition aiming to yield the lowest cost possible
for individuals and profitable operations for firms. However, theory needs few controls
and real life demand much attention in how markets develop themselves. One of this
issues is the power concentration of firms that can be attained by business operations
as the mergers, which tends to eliminate players from the market and to gather power
in less firms. Then, authorities own a set of rules put in place in order to avoid negative
market shares by evaluating the economic implications of such operations. In the
following document we approach how merger are assessed by EU and US authorities
taking as a case study, one of the most important companies unions as it was the ExxonMobil merger in the oil and gas industry. Is it right to allow raises in market power of
such important sector? How do we measure the global impact? How authorities
proceed? Are some of the question to be answered in this work.
1. Introduction
Aiming to achieve several economic goals, firms rely in broad strategic and operational
options like competing with prices or developing differentiation assets looking to get the
most from the market. Another set of tactics have been widely used as it is mergers &
acquisitions which encompasses a large series of factors but basically focused on the
union of two or more firms in order to gain financial, operational or strategic
advantages.
Several good things are brought with these unions where firms can obtain new
industrial capacities, additional brands, complementary assets, larger market shares,
technology, human resources as well as adding another element in the supply chain or
even removing one competitor from the field. So, it seems obvious that these actions
are valid plays for companies but consumers may be harmed by mergers especially if
those are among competitors, which are defined as horizontal mergers while unions
upstream or downstream in line for producing the same product are known as vertical
mergers.
One of the main issues with horizontal mergers (HM) is that players increase their
market power and their capacity of charging higher prices to consumers as they
approach to a less competitive field. Then, as consumers welfare may get affected the
economic analysis has stated that regulations on this may be applied in order to
guarantee a kinder environment for markets. However, HM are not always harmful as
they can develop efficiency gains with no price impact and bringing positive results to
most players. Moreover, there are mergers in low concentration markets that does not
impact consumers or even cases where the outcome of rising the market concentration
is better than leaving a company to fail by applying a sort of rescue.
Therefore, as the conditions and variables may broadly vary authorities have been
entitled to establish rules for measuring the impact of such strategy with the power of
ruling out any of them impacting in negative way the market configuration. In this work
we will address a practical and real merger case for understanding its economic
implications as well as the methodology usually applied by regulators in order to
evaluate its possible effects and how to proceed for the best outcome possible.
In the past 3 decades mergers have been a very common business practice and some of
them have lead all business news because of its large implications in media, competitors,
economist regulators and of course consumers. In Europe, for instance, 5.486 mergers
notification have been received by the EU regulator and 97% of them have been
approved.
Figure 1: UE merger statistics 1990-2014 (Two scale chart: # of merger and % of approval)
450
94%
100
50
Notifications
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
Case withdrawn - Phase 2
Case withdrawn - Phase 2
2014
95%
150
2013
95%
96%
2012
96% 96% 96%
95%
2011
200
96%
2010
97%
250
2009
300
2008
99%
2007
350
2006
400
101%
100%
100%
99%
99%
98%
98%
98%
98%
97%
97% 97%
97%
97% 97%
97%
96%
96%
95%
94%
93%
92%
91%
90%
100%
2005
100%100%
% approval
Source: (European Comission, 2014)

Looking at the high approval rate shown in the chart, we can assume that efficiency gains
have been expected in each of the approved cases or in contrary no consumers welfare
lose has been verified. In United States the merger tendency is pretty similar, in fact due
to the large yield of multinationalization a great part of the most important mergers
have been executed within this 2 regions, or even with influence in most continents
The oil industry is also one of the most important and strategic in the world, the volume
of its operations represents the largest single commodity globally traded, playing a main
role in most business competitive strategies. Reviewing sectorial figures we find that
53% percent of oil traded volume is done between 2 or more countries, accounting for
10% of world merchandise commercial exchange.
Figure 2: Top world exported products by value - 2009-2012 (Millions of USD)
2012
2011
2010
2009
-
500
1,000
1,500
2,000
Mineral fuels, oils, distillation products, etc

Machinery, nuclear reactors, boilers, etc
Pearls, precious stones, metals, coins, etc
Source: (International Trade Centre, 2014)
2,500
3,000
3,500
Millions
Electrical, electronic equipment
Vehicles other than railway, tramway
Plastics and articles thereof
Such relevance and development has engine several interesting merger strategies as the
one were going to analyze in this research. One of the most important mergers in the
world occurred in 1998 when Exxon and Mobil got together, constituting the sixth major
worldwide merger in terms of transaction value.
The union of these giants, not only had economic implications regarding the effects of
mergers, but in many other elements of the market system. Given that both companies
participated in wide range of operations relating the energy industry and in different
regions, the evaluation of the business agreement becomes very complex, and for this
reason were going to concentrate the analysis just in the horizontal merger implications
in global terms.
The idea is to review few historic aspects of the industry, to study in general terms each
one of the companies before the merger, contextualize the conditions under which the
union was held and the economic implications resulting from this process. We will also
evaluate the EU commission analysis and what is the methodology they use for
addressing this sort of entrepreneurial decisions, including what should have been the
outcome of the Herfindahl-Hirschman Index.
Thus, we aim to present a practical work giving a quick understanding of the economic
scenario together with the aspects affecting the market conditions and a clear
description of how authorities proceed in order to guarantee the balance between
producers and consumers. In this sense the document is divided in for main sections:
we make a Background review (2) before going into the details and conditions of the
Merger (3), after this we will join the Economic implications (4) appraisal for finally
summarize the business, institutional and economic Results (5).
2. Background
In the first part of this section wed like to comment in few lines how the industry was
created and where the big oil firms come from.
The creation of an oiled world.
Samuel Kier, the so called Grandfather of the Oil Industry in America developed a
medicine named Kiers Rock Oil sold around 1849 for 50 cents the bottle. (Mann, 2009).
Then, in 1853 Francis Brewer took a sample of Rock Oil, from Oil creek to the chemical
department of his university Dartmouth College where George Bissell, another fellow
student, in a visit to the school crossed by a sample of this liquid and send it to the
University of Yale. Professor Benjamin Silliman suggested that the Kier Rock Oil could be
distilled to produce kerosene. Bissell end it up buying some acres in the area and
organized the first company of oil called the Pennsylvania Rock Oil & Co in 1854.
Bissell was the first one to envisioned profit for selling the kerosene for lighting,
(Stephen Land - The History Channel, 2010) but he needed funding for guaranteeing
supply which required, according to his project, to drill the ground and obtain more
quantity of the black oil. As usually happens no much people believed in this kind of
ideas, but he persisted hiring his future partner Edwin Drake a former railroad conductor
to drill his oil field. Drake was sent to Titusville working for the former Penn Rock Oil &
Co, now Seneca Oil Co, where after several failure attempts Drake brought a Kiers Rock
Oil employee William Uncle Billy Smith who finally pumped the first oil well in 1859.
(Mann, 2009)
In parallel Kier also went to the University of Pennsylvania in Philadelphia and professor
Curtis Booth recommended to distil the oil and produce illuminant to compete with
whale oil for lighting lamps. His cheaper product, made in a tiny adapted whisky
distillery, was now called carbon oil and with his previous selling experience, he obtained
increasing acceptance of his special lamp with oil rock illuminant (which came with a
special lamp) driving these to the first sales of oil as energy source in America. Another
pioneer, Charles Lockhart who in 1961 built the first commercial scale oil refinery,
produced 250 barrels a day making the starting point in the industry and the birth of a
new economy to come. (Mann, 2009)
While before Kier, Drake and Lockhart were working in USA, in the other side of the
ocean, Ignacy Lukasiewicz using Dr. Abraham Gesner techniques also produced
kerosene in 1853 from wells in Poland and in Romania 4 years later where they built
their first distillery which product was used in public lamps of Bucharest. (LESCAROUX &
RECH, 2013)
Nevertheless, the big guy of the oil industry was still to come a 23 years old born in the
state of New York, whose first work was as bookkeeping and has the name of John
Davidson Rockefeller. (Chernow, 1998). It was in 1862 when he first arrived to Titusville
and soon he founded in Cleveland, Ohio a small refinery where they improved the
method using sulfuric acid for avoiding the lamps to smoke. They soon founded the
Standard Oil Company of Ohio with a value of 1.000.000 USD grouping two refineries
and a distribution company altogether managed just 10% of Cleveland total refining
capacity.
By 1877 Standard Oil controlled more than 90% of the oil refineries in US and in 1900
between 80-90% of the transportation and distribution business, keeping relatively
cheap prices between 0.7$ and 1$/bbl. (LESCAROUX & RECH, 2013) (Popove, 2010). It
was a growing but still reduced industry in the United Stated by that time. Expansion to
other countries became a reality selling oil to Europe, Latin America, South Africa and
China. With almost no competition in the sector, the industry encountered one
competitor from another side; a huge one.
The energy consumption in United Stated started a change in sources configuration,
from 1775 to 1850 the only important energy source was exclusively wood, giving the
throne to coal which became by far the main energy source with an impressive growth
given the extensive use for heating, railroads and at the end of the 19th century for
electricity; finally a nascent oil and electrical power source made their appearance in the
scheme.
Leading the young oil industry still new with not much regulations, Rockefeller gained
many enemies in his way. The first setback was the application of the Sherman Antitrust
Act (Late 19th century) that prohibited any king of conglomerate organization which
restricted the free trade within the United States. (United States History, 2014),
favorably Standard Oil didnt receive much consequences with this one. In 1901
President Roosevelt ordered an investigation which forced the dissolution of the
Standard Oil trust by an Us Supreme Court decision.
Thirty four independent companies resulted from this division some of them became
big player in the business initially called Standard Oil of New Jersey, Standard Oil of New
York and Standard Oil of California became later on Exxon, Mobil and Chevron
respectively. At this point Rockefeller was in the center of the stage, and became a target
for newspaper researchers, an undesirable issue.
In Europe Industry was developing at the same time but in a different rhythm. One of
the first companies related with petroleum was the Shell Transport from England,
initially dedicated to standard shipping and then in oil transporter. They were importing
the product from Borneo, Russia and Japan and were the first to use the Suez Canal for
oil transportation giving them and special advantage against the big American regarding
the Asian market; Rockefeller made an offer for buying the company but it was rejected.
Shell made also an agreement with Dutch Royal Petroleum Company setting operations
in Netherlands, Russia and the region of Azerbaijan which converted the company in the
provider of 75% of the oil outside US. Another important company in Europe was
Branobel in the Caucasus region, that later disappeared after the Russian Revolution
intervention.
By 1938 the United States produced 21 trillion barrels of oil (4.900 quadrillions of Btu
Erreur ! Source du renvoi introuvable. scale) times more than the Soviet Union (the first
producer by 1900) and 64% of worlds oil consumption. In spite of this amazing growth,
coal was still the first energy source in the United State, at this point supported by the
use in electrical generation; also huge spreading technology. Around 1950 the lines of
oil and coal crossed each others (Figure 3) leaving the black liquid to go way higher over
the black solid. Between 1900 and 1920 Samuel J. Schurr and Bruce Netschert calculated
that total energy consumption in United States registered an amazing growth of 123%
(A, 2004)
Figure 3: Estimation of world primary energy production 1900-1980 (TWh)
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
1900
1902
1904
1906
1908
1910
1912
1914
1916
1918
1920
1922
1924
1926
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
Coal
Gas
Hydro
Nuclear
Oil
Other Renewables
Source: (Etemad & Luciani, 2014)

From 1940, when oil exceeded coal as main energy source the industry became a huge
global market controlled by few companies all of them coming from the powerful
economies of that time (Great Britain, France and United States). In fact, just 7
companies in the world were managing a great part of world economy The Seven Sisters:
The Anglo-Persian Oil Company (eventually BP), Gulf Oil, Standard Oil of California
(SoCal), Texaco (Chevron), Royal Dutch Shell, Standard Oil of New Jersey (Esso, then
Exxon) and Standard Oil Company of New York (Socony, then Mobil) all of them
signatories of the Red Line Agreement (US Department of State, 2014) stating that none
of them will pursue oil interest on the Middle East for not fighting for a market
advantage between themselves risking the loose their position, and this represented the
first cartel of oil also known as the The Consortium of Iran; the controlled 85% of world
oil reserves.
Since then all major sisters were involved in the oil huge business but the power
distribution started to have different configuration after the 90s.
3. The Merger
Oil industry mergers.
10
High merger activities was experienced from 1994 reflecting technological changes,
globalized markets, transformation of the form and means for competing and a more
dynamic financial market. The oil intensified each year its strategic factor for the
development of nations, in consequence huge efforts brought: new discovered reserves,
innovative processes along the supply chain, cost reduction of information, raise of
intermediate markets, entry barriers weakening bringing specialized emerging firms to
the field, an increasing activity on financial instruments in spot, forward and futures,
price fluctuations and the fear for another price shocks fueled the creation of new
market strategies.
Major horizontal merger started during 1998 beginning with the announcement of the
union between BP and Amoco that projected $2 billion of savings. Seeking to improve
cost efficiency the Exxon-Mobil merger followed as the second one of the year which
concluded with a third one between the French Total acquiring the Belgian PetroFina. It
didnt stop, this last merger Total-Fina win a hostile bid in 1999 getting Elf Aquitaine
which led them to become the fourth largest oil company. Then, on the same year BPAmanco also bought Arco with the some remedies required by the US regulator, which
in 2000 denied a merger between Chevron and Texaco that resulted after in a takeover.
It wasnt over yet, other major movements were played, DuPont was acquired by
Conoco who then bought Gulf Canada Resources in 2001. Phillips Petroleum acquired
the largest US independent refiner that ended in a Conoco-DuPont-GulfCanada merger
with Conoco-Tosco becoming the sixth largest oil firm.
Part of these business tactics were made regarding at the large influence of the OPEC
cartel in the market, especially in the control on prices. OPEC had also an strong power
in geopolitical as evidenced in their position to the previous oils shocks were oil was first
time used as threating method when the OPEC claimed that they would stop US oil
supply if they supported Israel in the Yom Kippur war against Egypt and Syria.
Goals
The purpose of this union was the adaptation to market conditions through the
combination of complementary assets. Several specific objectives pushed their interest:
Exxon-Mobil would have stronger presence all over the world leveraging their
initial activity of exploration for reserves
Stronger position to invest in important programs with high risk/return
Geographic expertise, for example: Exxon had experience in deepwater
exploration in Wet Africa and Mobil in production in Nigeria and Equatorial
Guinea. In the Caspian region Exxon was present in Azerbaijan, and Mobil in
Kazakhstan and Turkmenistan. Joining also capacities in South America, Russia
and Eastern Canada
They could obtain savings by reducing duplicate facilities and excess of capacity.
11
It was also expected to reduce costs by the combination of administrative

operations.
The application of best business practice had generated synergy benefits.
Joining research and development programs had enhanced their knowledge and
capacity, pushing forward new technology development.
Of course, before the process you can predict many positive results but risk come along
with the operation that can impact in the opposite way if synergies are not attained. The
volume of resources used in this kind of deal is enormous and as far as it goes the risk
also increases. When firms like these, with tradition and very large size decide to merge
the post-merger integration becomes very complex; its not a huge firm buying a little
one that atomically have to join the buyer structure.
The goal of efficiency gain then, its a very challenging matter and there are some
exercises that may have a better idea of what would have happened as regarding to
rivals stock prices (Motta, 2004). We plotted historic prices from some competitors to
take a look at reactions and it shows no clear pattern of a negative reaction in rivals, In
the specific case of BP it seems a very positive reaction during that period but can be
due to the own expectations coming from its previous mentioned merger
Figure 4: Merging firms share stock prices - 1997 - 2001 ($)
40
35
30
25
20
15
10
5
ConocoPhillips
Exxon
Total
BP
Source: (Yahoo Finance, 2014)

In general, might not be useful to apply this technic because all firms were executing, in
very close timeline, mergers & acquisitions where the environment was quite uncertain.
Notwithstanding, we see that Exxon prices rose what could mean positive expectations
from shareholders, in fact zooming into the specific dates of the announcement we can
see that the cumulative return in the 2 weeks prior the date was 14.8% for Mobil (MOB)
Nov-01
Sep-01
Jul-01
May-01
Mar-01
Jan-01
Nov-00
Sep-00
Jul-00
May-00
Mar-00
Jan-00
Nov-99
Sep-99
Jul-99
May-99
Mar-99
Jan-99
Nov-98
Sep-98
Jul-98
May-98
Mar-98
Jan-98
Nov-97
Sep-97
Jul-97
May-97
Mar-97
Jan-97
12
and -0.5% for Exxon (XON) and by 2 weeks after the cumulative returns passed to 20.6%
and 3.1% respectively; evidencing good expectation of efficiency gains.
Nevertheless, the announcement of the merger specialist predicted a $2.8 billion
savings in efficiency gains for the first operating year. By 2000 the company reported a
$4.6 billion benefit from synergies.
The deal
Table 1: Merging firms, financial values
The market value of Exxon by that time was

close to 3 times higher than Mobils with a rate
of Market Value/ Book Value of 4 points for the
first and 3.1 for the second (Table 1).
The total operation was for 1.030 million of
shares at $72 which resulted in $74.2 billion
operation. It was clearly higher at 26% above
the market price at that time and 291% above
the book price. This reflects that the value of
acquiring the firm would lead to larger returns
as they were willing to pay even more than the
market was willing to pay for its shares.
Exxon
Mobil
Market Value (billion)

$175.00
$58.70
Book Value (billion)
$43.70
$19.00
Market Value / Book Value
4.0
3.1
LTM Net Income (million)
$7,410
$3,272
PE Ratio
23.6
17.9
Total Paid (billion)
$74.20
Premium Over Market
Amount
$15.50
From Market Value
26.41%
Premium Over Book
Amount
From Total Paid
$55.20
290.53%
Source: (Weston, 2002)

As the buyer paid 1.32 shares for each Mobils
share the initial 780 million of them resulted in the mentioned 1.030 shares for Mobil in
the total shares distribution. This means that in pre-merger terms the distribution was
75%-25% but the premium paid led to a final 70%-30% composition of each company
participation.
Table 2: Merger financial terms
Pre-Merger
Dollar Amounts
Share Price(1)
Shares Outstanding (million)(2)
Total Market Value (billion)
Exxon shares per Mobil's
Number of Shares (million)
Percentage
Exxon
$72.00
Mobil
$75.25
2,431
780
$175.00 $58.70
Exchange Terms
1.32
Post-Merger
2,431
Total
Exxon
Mobil
$233.70
74.90%
25.10%
70.20%
29.80%
1
1,030
3,461
13
4. Economic Implications
Definitions
Horizontal mergers go normally against competition theories as they reduce the number
of rivals in the market which technically would lead them to higher market power and
the ability to increase prices; which would result in prejudice of consumers welfare.
Another negative effect that may result from a horizontal merger is the configuration of
a more favorable environment for collusion. And with it, many distortions causing higher
prices, less competition and negative impacts to consumers:
The more an industry is already characterized by the co-existence of factors

favoring collusive outcomes, the more risky to allow the merger
Entry barriers favoring less competition
Absence of counterpart power
Coordination for the volume of supply, increasing prices
In the other hand, mergers have the ability to bring efficiency gains as it was expected
in the case of Exxon-Mobil where firms can reduce their costs thereby in theory leading
to a reduction of market price, or at least not a higher increment of it. As we saw in the
previous section, Exxon-Mobil were able to reduce their costs but this was not
evidenced in oil related products prices, where we have experienced since the date of
the oil the merger wave a steady price raise.
Figure 5: Crude oil prices 1960 - 2012($/barrel)
120.00
100.00
80.00
60.00
40.00
20.00
$ money of the day
2011 $ value
Source: (BP, 2013)

Such efficiency gains may come from different sources as:
Economies of scale or scope

Enhanced production configuration
Synergies in R&D
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
0.00
14
Marketing and/or distribution rationalization

Reorganization, keeping best managers
Hence, efficiency gains becomes the key factor in order to decide whether the merger
would bring positive outcomes to the market or not. Such responsibility is in the hands
of authorities in each country or region, in the case of Europe is European Commission
for competition matters, who are in charge of evaluating the merger conditions and rule
the approval procedure. They will approve mergers if they argued gains could be
attained just by merging, this means that if for example they claim reduction cost in any
activity they must prove that the only way to reduce it is by merging and not by other
mean.
Figure 6: Horizontal merger unilateral effects scheme
Merger
Increase Market Power

Decrease consumer
surplus
Decrease total welfare
No
Ambiguous effect on
welfare
The rise of market power
can be outweighed by a
price decrease
Efficiency
gains
Yes
Source: own diagramming based on (Motta, 2004)

It worth to mention that even with gaining efficiencies this doesnt guarantee that firms
would reduce their costs and have less power for marking prices. Authorities expect that
the decision will encourage company to do so, and the market will naturally push them
towards the positive goal.
Merger Guidelines
Seeking for evaluate the outcome of a merger and the required gains, regulators will use
methods aiming to guarantee that such efficiencies are to be obtained. We will make a
description of the procedures applied by authorities for this matter, based on EU
commission guidelines.
The fundamentals for analyzing a horizontal merger are defined in the market
assessment approach which in general works by defining relevant markets specified in
product and geographic terms. The goal is to set a series of conditions regarding the
firms activity, by which authorities are able to assess with more or less exactitude its
market power.
15
The EU defines:
Relevant Product Markets: A relevant product market comprises all those

products and/or services which are regarded as interchangeable or substitutable
by the consumer, by reason of the products' characteristics, their prices and their
intended use.
Relevant Geographic Market: comprises the area in which the undertakings
concerned are involved in the supply and demand of products or services, in
which the conditions of competition are sufficiently homogeneous and which
can be distinguished from neighboring areas because the conditions of
competition are appreciably different in those area.
In addition to these concepts, new advanced procedures have been added to the EU
guidelines in what is considered a major contribution to the evaluation of HM through
modern economic analysis, where its stated that the assessment of mergers needs to
go beyond the definition of relevant markets and the calculation of market shares.
For doing the relevant market assessment regulators use the SSNIP test (Small but
significant and non-transitory increase in price), also known as the Hypothetical
Monopolist test. The idea is to identify the smallest relevant market where a
hypothetical monopolist or cartel could impose a profitable price in a non-transitory
shape. Authorities may hold a series of interviews to consumers regarding at their
decisions if the tested product experiences an increase of 5% for at least one year, so, if
buyers are willing to switch to an alternative product to the point that this change is not
convenient for the company is considered that there is not a relevant market in terms
of market configuration.
Criteria must be testes looking for clarify the market reaction to prices or supplied
quantities, other configurations are:
Own-price elasticity of demand: percentage change in the quantity demanded

that follows a 1% increase in the price of a product.
Cross-Price elasticity between two products A and B: percentage change in the
demand for product B after an increase of 1% in the price of product A.
Price correlation test: how price series of different products evolve over time.
Price differences: Two products in the same market will tend to have the same
price.
The relevant geographic market is tested similarly, focused on the changes that can
occurred in the movement of products from other areas if prices are modified,
transportation cost becomes a key agent in this test.
For the issue of market concentration regulators apply the Herfindahl-Hirschman Index
(HHI or H index) that basically measures how much a given market is concentrated by a
16
reduced amount of firms reaching a considerable market power by which they can profit
either by price control or by collusion. Each regulator is entitled to set a series of
parameters indicating when a market concentration is not favorable for the consumers
welfare. The H index is considered a mathematical measure of the price-cost margin
relation and a measure of monopoly power. The application is done obtaining the
market share of the sector by firm and then adding the squares of the market share of
all of them.
If the result is below 1.000 the market concentration is not considered harmful, by
contrary levels above that, regulators will disapprove or intervene in the merger
decision.
Table 3: Scheme for market concentration analysis. US Guidelines
HHI
HHI - Decision
Low <1000
Medium >1000 <1800
High > 1800
All other cases
Approved
Approved if gains is lower than 100 points
Only if is less than 50 points
Investigation is required
Source: (Motta, 2004)

In general weve seen how to assess a market when horizontal mergers are being
developed. In the following sub-section we will relate these tools in the Exxon-Mobil
case.
EU commission analysis
The commission received the notification of the merger on May 1999 mainly because
concerns on competition in northwest Scotland. Nevertheless, having received the
notification of a specific element they are forced to make a complete analysis beginning
by the general industry analysis and the approaching specific cases.
a) Parties and the operation:
Exxon Corporation a diversified company active world-wide in the exploration,
development, production and sale of crude oil and natural gas (1). Refining and
sale of refined petroleum products (2). The development, production and sale of
various chemical products (3). Production and sale of coal and minerals (4) and
power generation (5). Mobil was also a diversified company active world-wide in
the same 3 first operations where Exxon did.
The commission received the terms of the deal (Erreur ! Source du renvoi
introuvable., Erreur ! Source du renvoi introuvable.) where it was indicated that
Mobil will merge a wholly owned subsidiary of Exxon, with Mobil as the surviving
corporation. As a result Exxon would hold 100% of Mobils issued and
outstanding voting securities. As we saw previously each holder of Mobil
17
common stock will receive 1.32 shares of Exxon common stock for each share of
Mobil common stock. Resulting in in Exxon shareholders owning approximately
70% of the merge organization, the 30% for Mobils shareholders.
b) Competitive Assessment:
For studying the market the commission used the usual division of the oil and
gas sector. Upstream: including exploration, development and production and
downstream: refining, sales, distribution and oils transforming process. Each one
of these value processes will be evaluated in terms of competition.
c) Relevant Product Market for: exploration, development and production:
Although is usually argued that exploration, development, production and sales
are too closely connected, the EC considers that exploration constitutes a
separate product market. Exploration has 2 different clients, the host country
researching for reserves to sell or to exploit and the second one is when real
pumping is going to be set by the selected firm granted to do it.
The EC also agreed that in this phase youre not sure what would be the mix of
the mineral youre going to extract between oils and gases, thereby is not
justified to make a distinction between exploration for oil and for natural gas.
For the rest of the processes (Development, production and sales) gas and oil are
treated with large differentiations, where cost and prices are far away so a
Relevant Product Market for each one of the final product will be established.
At the end the EC suggested that is not necessary for the appraisal of the effects
on competition to define precisely the Relevant Product Market according to the
various stages of the exploration, development, production and sales of
respectively oil and natural gas.
d) Relevant Geographic Market for: exploration, development and production:
From the perspective of European demand the EC considered that the
exploration market is world-wide in scope. For the development, production and
sales of crude oil a world-wide scope was defined too. For gas the geographic
market would be restricted to the EEA, Algeria and Russia.
Regarding smaller geographic areas within the region the relevant geographic
market was left open because it wasnt expected to alter the conclusion of the
competitive assessment
e) Market players:
18

The industry is characterized by the active presence of 3 main groups: 1) The
State-owned produced, 2) the majors (Mostly former seven sisters), which are
vertically integrated oil companies with international operations and 3) a
multitude of substantially smaller oil companies.
f) Effects of the merger in competition:
Concerns in the EC were valid. Exxon-Mobil merger together with the other
major acquisition of BP-Amoco-Arco will join Shell in building a fourth-tier of
competitors. Any measure you wanted to apply as market capitalization,
reserves granted, oil and gas production; any of them would show a large gap
between these super majors and the remaining firms.
With this environment, the three super majors could be in the future in a
privileged position to explore and develop future important reserves against the
other players in the market. The advantage of large financial strength might lead
to riskier and more profitable investments where the other players would find
hard to bid for
Given that the typical time lapse between the first stages of exploration and the
first production varies between 5 and 15 years, there is the possibility that new
non-OPEC reserves and production would be influenced to a significant extent
by the super majors.
With this scenario the competitive constraints limiting OPECs ability to work as
a cartel would have been lessened. The 3 majors firms would have the same
interests as OPEC that may yield to alignment on the OPEC decisions of limiting
output to certain level without fear that others could benefit from it. This would
have clearly translated into the strengthening of the cartels dominant position
in the crude oil market through the creation of an oligopolistic design. The
possibility to rise prices would lead also to trigger new explorations.
On the basis of the foregoing, the EC concluded that the operation raised serious
concerns in regard of the compatibility with the Common Market and the
functioning of the EEA agreement, so further investigation would have been
held. To this, the parties contested the Commissions on mainly two grounds.
First, the super majors would still be facing competitive constraints from smaller
oil companies. Secondly, host countries control oil and gas production and in any
case would have no incentives to let oil companies restrict production.
The investigation confirmed that small explorers do not seem to believe that the
emergence of a new class of super majors would threaten their position. Because
19
of size differences they would not compete for the same type of exploration
rights and they would not be dependent on the bigger explorers to sell their oil.
In addition, majors such as Chevron, Texaco, Elf or Total would all seem to have
unchanged capacity to explore and develop fields anywhere in the world. The
parties have provided numerous examples of the involvement of majors in
current projects all over the world. In addition to this, the market investigation
confirmed that typical concession contracts between governments and
explorers-producers prohibit the latter from limiting their output
Regarding natural gas, it was considered a low possibility that parties together
with the super majors could control the EEA production affecting competition.
Norway had a string position delivering gas, so a collective dominance didnt
seem a probable outcome. At the end, the Commission concluded that the
concentration wouldnt lead to the creation or strengthening of a dominant
position on the markets for the exploration, development, production and sale
of crude oil and natural gas
HH Index
Using the data available we made the concentration analysis before the merger and the
one estimated by adding Exxon and Mobil participation. There are few ways to calculate
the index, in this case we use annual revenue as indicator of the market share. We
obtained the data of 280 companies involved in the oil and gas industry, the first 20
sharing a 68% of the whole market
Table 4: HH Index before merger (1998-1999)
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Company
Royal Dutch/Shell
Exxon
British Petroleum (including U.S.)
Mobil
Texaco
Elf Aquitaine
Chevron
National Iranian Oil
Amoco
China National
Ente Nazionale Idrocarb
Petroleosde Venezuela SA
Petroleos Mexicanos
Total
Shell
Petroleo Brasileiro SA
Revenue
171,964
137,242
87,584
65,906
46,667
45,087
41,950
40,890
36,287
36,250
34,997
34,801
34,035
32,781
28,959
27,944
Market
Share (%)
11.65
9.30
5.93
4.47
3.16
3.06
2.84
2.77
2.46
2.46
2.37
2.36
2.31
2.22
1.96
1.89
Market
Share^2
135.78
86.48
35.22
19.94
10.00
9.33
8.08
7.68
6.05
6.03
5.62
5.56
5.32
4.93
3.85
3.59
20
17
18
19
20
21-280
Nigerian National Petroleum

Kuwait Petroleum
Nippon Oil
Repsol SA
260 firms
25,808
23,572
22,020
21,947
479,083
1,475,774
1.75
1.60
1.49
1.49
32.46
100
3.06
2.55
2.23
2.21
25.83
389.35

The previous market share yielded a low market concentration thanks to a significant
group of important firms and a large number of second and their-tier oil and gas
companies. The level was at that time in 389.35 which is low enough for a market
structure. Its important to remind that after 1999 other larger mergers were executed,
so not only the merger of Exxon with Mobil will change the market share but the other
unions will also affect the structure. Hence, the configuration was going to be
importantly impacted by these new unions and HHI should be required. We show in
Table 5 the new distribution of concentration after these new business deals.
Ranking
Firms
Concentration before merger
Exxon-Mobil
BP Amoco-Arco
BP-Amoco
TotalFinal-ElfAquitaine
Chevron-Texaco
Phillips-Conoco
Total-PetroFina
Phillips-Tosco
Conoco-GulfCanada
1
2
3
4
5
6
7
8
9
11-272 262 firms
Revenues
(millions)
HHI before
mergers
Share after
merger
HHI
after merger
189.49
94.08
70.45
44.30
36.06
20.30
12.96
8.84
2.35
203,148
143,143
123,871
98,220
88,617
66,492
53,133
43,870
22,622
106.43
72.16
41.27
22.30
18.08
11.19
6.84
4.48
2.11
13.77
9.70
8.39
6.66
6.00
4.51
3.60
2.97
1.53
632,658
1,475,774
104.49
42.87
83.06
21.92
29.18
22.00
17.98
9.11
6.12
4.36
0.24
New
HHI
389
472.41
494.33
523.51
545.51
563.49
572.60
578.72
583.08
583.32
Total
583.32
HHI
Table 5: HH Index after the Merger
Source: (Weston, 2002), * This table shows just merging firms as the HH total
index will only be affected by HHI which in the cases of not merging firms
remain as 0, so does not modifies the result.
The aforementioned mergers resulted in this new market structure with ExxonMobil having the leading position and a market share of 13% 4 points over the
second in the ranking. The first 10 oil companies grabbed a 57% of global sales, while
the remaining 43% was shared among other 262 firms. At the end the new HHI rose
by 110 points reaching a 583.32 total market concentration. Comparing this addition
with authorities guidelines (Table 3) we can noticed that in a global scale evaluation
the merger would have been approved, as indeed happened, as the result is far
below of the thresholds expected for analysis.
21
Resolution
Given the actual panorama in general terms the EU commission allowed the agreement
in its general terms by arguing: Therefore, the Commission concludes that the
concentration will not lead to the creation or strengthening of a dominant position on
the markets for the exploration, development, production and sale of crude oil and
natural gas.
The investigation was held deeper in reviewing also each particular cases in specific
regions for example:
Gas to Liquid technologies: The EU was concerned of a possible creation of

dominant position in this kind of technologies. They finally agreed that the
concentration will not lead to the creation or strengthening of a dominant
position on the markets for the exploration, development, production and sale
of crude oil and natural gas.
Or in the case of underground storage of natural gas where the result was: that
the barriers to entry for potential competitors in the market for swing capacity
in the south of Germany will be increased as a consequence of the concentration.
Therefore, the concentration strengthens the dominant position of Ruhrgas in
the market for swing capacity in the South of Germany (Munich area).
Other markets that appraised were: 1) Base oils, additives and lubricants, 2)
Refining and marketing of fuels, 3) Austrian specific market, 4) France
motorways, 5) Germany, 6) Luxembourg, 7) Netherlands, 8) The United Kingdom,
9) Aviation lubricants and 10) Aviation fuels.
Some remedies were accepted by the incumbents as in 1) the Dutch wholesale
transmission market of natural gas, 2) German long-distance wholesale
transmission market, 3) Underground storage facilities serving the south of
Germany, 4) Base oil manufacturing capacity to be sold to BP-Amoco, 5) Dispose
Mobils share in Aral and to terminate its participation in the fuel part of the
BP/Mobil joint venture avoiding the rise of oligopoly conditions in Austria,
French toll motorways, Germany, Luxembourg, the Netherlands and the UK, 6)
Divest is Exxons world-wide aviation lubricants business with commercial
airlines, to a purchaser approved by the Commission, finally 7) To sell aviation
fuel pipeline capacity from the Coryton refinery to Gatwick airport equivalent to
Mobils 1998 sales volumes at Gatwick.
According with this elements of the resolution the final decision was then: On condition
that the commitments summarized in paragraphs 826 to 862, and laid out in detail in
the Annex, are fully complied with, the concentration notified on 3 May 1999 consisting
of the merger between Exxon Corporation and Mobil Corporation is declared compatible
with the common market and the functioning of the EEA Agreement.
22
5. Results of the Union

The aftermath for the merger of Exxon and Mobil have been with not doubt a successful
history. The economic side, dedicated to provide a kinder environment for consumers is
a subject of large discussions. The theory states that in order to increase consumers
welfare is necessary to attain gains by efficiencies that would lead to a cost reduction
transformed in better prices for consumers. Its not risky to ensure that such efficiencies
have been obtained but the question remains in if these gains have been translated to
final consumers.
Measuring this factors, seeking to evaluate consumers benefit is not an easy task, oil
prices have experienced maybe the largest rise in history (Figure 5) due to multiple
reasons different from the market power held by Exxon-Mobil. Moreover, the
production cost for oil and gas has also been significantly modified by new technologies,
reserves more complicated to exploit, the impact of the fracking and other elements
that certainly alter the cost matrix.
We can see here, the complete perspective of Exxon and then Exxon-Mobil market trade
volume and share prices.
Figure 7: Exxon-Mobil market performance 1980 - 2014 (Two scale volume and price in US$)
250,000,000
120
100
200,000,000
80
150,000,000
60
100,000,000
40
50,000,000
20
Volume
Day High
Day Low
Close
Source: (Yahoo Finance, 2014)

In the figure above, since 1997 the merging firm market value has drawn a increasing
line, trend that seems going hand by hand with international prices. This evolution
makes difficult to see, in a brief evaluation if the success of the union is thanks to
efficiency obtained by themselves or leveraged by oil prices. Analyst suggest that this
23
comes from both sides, as efficiency in various elements of its value chain have been
registered.
By taking current available data we updated the HH Index, this time not using 280 firms
as we did before but the first 106 with information available and we plot it to review
how the sector global sales are actually distributed.
Figure 8: Oil & Gas firms' results and market share (2013
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Company
Country
ExxonMobil
United States
Royal Dutch/Shell
Netherlands
BP
UK
Chevron
United States
ConocoPhillips
United States
Total
France
ENI
Italy
Valero Energy
United States
SInopec
China
Petrobras
Brazil
Statoil Group
Norway
Repsol-YPF
Spain
PetroChina
China
Marathon Oil
United States
SK Corp
South Korea
Gazprom
Russia
Nippon Oil
Japan
Lukoil Holding
Russia
Sunoco
United States
Indian Oil
India
86 firms
Revenue
328
307
249
185
162
145
83
82
70
58
58
48
47
44
42
36
36
35
31
30
661
2,738
Profits
Assets
($Billion) ($Billion)
36.13
25.31
22.63
14.10
13.62
14.51
9.87
3.59
4.35
10.15
4.55
2.65
12.43
3.05
1.63
7.24
1.23
4.40
0.97
1.25
82.97
276.63
208.34
216.95
206.91
124.81
107.00
125.47
91.03
32.77
56.78
76.64
42.20
51.41
73.68
25.99
41.64
104.56
32.58
29.62
9.93
19.34
844.80
2,522.45
Market value
($Billion)
362.53
203.52
225.93
126.80
83.99
154.74
114.42
33.17
57.05
99.82
55.21
34.12
172.23
25.87
7.95
184.37
11.11
65.12
10.11
14.62
1,210.13
3,253
Market Market
share share^2
11.99
11.20
9.11
6.75
5.93
5.29
3.03
3.00
2.57
2.13
2.11
1.74
1.71
1.62
1.52
1.33
1.30
1.28
1.14
1.10
24.13
100
Source: (Forbes, 2014)

Recalling that were not using the same number of firms, we calculated the HHI
obtaining a level of concentration of 523 which is a little bit lower than the one
registered near 2000, just after the merger in 583. Now the first 20 oil enterprises gather
a 75% of total sales.
Being one of top 10 world public companies, and having not any claim in the EU
commission after the merger, we can presume a successful operation with not
significant impact in its power to set prices in prejudice of consumers.
143.66
125.47
83.00
45.60
35.18
28.02
9.21
9.00
6.59
4.55
4.46
3.03
2.94
2.64
2.32
1.77
1.68
1.64
1.30
1.21
10.46
523.73
24
6. Conclusion
Weve seen through this analysis several interesting aspects regarding horizontal
mergers. In one side, economic theory suggest that merger may affect the market by
using the merged power for controlling prices in prejudice of consumers; except in cases
where the union enables efficiency gains. In the other side, we showed that merger is a
very common practice in most of the cases theyre approved. In order to balance
consumer and suppliers benefits, policies have been designed to entitled special
authorities with the power to decide weather is convenient or nor this king of business
operation.
Reviewing the Exxon-Mobil case study within the oil industry, we presented how
authorities assess horizontal mergers using a set of rules and tools in order to measure
the probable power gain that may conduct them to rise prices. Additionally, we
implemented one of this tools the HH Index which measures concentration and gives to
evaluators a very important clue of the impact of such unions. They found that in ExxonMobil case as well as the other oil industry mergers, there was not general threat as they
approved the operation. Furthermore, we saw how in specific relevant product and
geographic markets some remedies must be taken in order to control the merging
power. Thus, we approached the main guideline for assessing markets and horizontal
merger using the Exxon-Mobil.
The high financial benefits coming from mergers is so high, as we saw in Exxon-Mobil,
that firms will go with these strategies as much as they can, thereby authorities must
play a relevant role in guaranteeing a competitive market configuration. New guidelines
encompasses new ideas for improving how these cases are addressed as the one that
claims that not only the concentration analysis should be done but further evaluating
tools. We expect then, successful merger in benefit of consumers.
25
References
A, G. (2004). History of Oil Industry. Enciclopedia of Energy.
ABB. (2014). Tesla vs Edison: the war of currents. Retrieved from Press releases:
http://www.abb.com/cawp/seitp202/c646c16ae1512f8ec1257934004fa545.as
px
BP. (2013). BP Statistical Review of World Energy June 2013. London, United Kingdom.
Chernow, R. (1998). Titan : The Life of John D. Rockefeller, Sr.
Energy Policy. (2011). The American economy: A historical encyclopedia. Retrieved from
http://search.credoreference.com/content/entry/abcamerecon/energy_policy/
0
Etemad, B., & Luciani, J. (2014, 04). The Shift Project Data Portal - Historical Energy
Production Statistics. Retrieved from World primary energy production:
http://www.tsp-data-portal.org/Energy-Production-Statistics#tspQvChart
European Comission. (2014). Competition - Merger statistics. Sint-Joost-ten-Node,
Belgium.
European Commision. (1999). Case No IV/M.1383 Exxon/Mobil - Regulation No 4064/89
of Merger Procedures. Brussels, Belgium.
Forbes. (2014, 05). The world's bigger public companies. Retrieved from Oil & Gas
industry: http://www.forbes.com/global2000/
International Trade Centre. (2014, 04). Trade Map - International Trade Statistics.
Retrieved from Imported products in 2012 by value and share:
http://www.trademap.org/tradestat/Product_SelProduct_TS.aspx
LESCAROUX, F., & RECH, O. (2013). Oil Economics.
Mann, A. (2009). Petroleum Pioneers. Western Pennsylvania History.
Mergedata. (2014, 05). Cases. Retrieved from M.1383 - EXXON / MOBIL:
http://www.mergerdata.net/wiki/index.php?title=M.1383_-_EXXON_/_MOBIL
Micheloud, F. (2014). Rockefeller and the Standard Oil. Retrieved from Alliances with the
railroads: http://www.micheloud.com/FXM/so/alliance.htm
Motta, M. (2004). Competition Policy: Theory and Practice. Cambridge University Press.
Popove, M. (2010). The economics of oil.
26
Stephen Land - The History Channel. (2010). History of Oil. Retrieved from Youtube:
http://www.youtube.com/watch?v=WtNtlQ2Gso0
Texas State Historical Association. (2014). Oil and Texas, A Cultural History. Retrieved
from Texas Almanac: http://www.texasalmanac.com/topics/business/oil-andtexas-cultural-history
U.S. History. (2014). Early American railroads. Retrieved from The rise of American
Industry: http://www.ushistory.org/us/25b.asp
United States History. (2014). Sherman Antitrust Act. Retrieved from American History:
http://www.u-s-history.com/pages/h760.html
US Department of State. (2014). Office of The Historian. Retrieved from MILESTONES:
19211936.
The
1928
Red
Line
Agreement:
http://history.state.gov/milestones/1921-1936/red-line
Weston, J. F. (2002). The Exxon-Mobil Merger: An Archetype. Los Angeles, USA: The
Anderson School at UCLA.
Yahoo
Finance. (2014, 05). Quotes. Retrieved from Historical Prices:

http://finance.yahoo.com/q/hp?s=COP&a=00&b=1&c=1980&d=04&e=2&f=201
4&g=m
Yahoo
Finance. (2014, 05). Quotes. Retrieved from Historical prices:

http://finance.yahoo.com/q/hp?s=COP&a=00&b=1&c=1980&d=04&e=2&f=201
4&g=m
27
Appendix
(European Commision, 1999)
From Mergerdata we obtained the following summary of the Exxon-Mobil merger.
(Mergedata, 2014)
Type of merger and general concerns
Theory of harm possible competitive effect(s)
Single
dominance
YES
Unilateral
effect
NO
Collective
dominance
YES
Vertical
effect
NO
Multi-market
effect
NO
Relevant markets identified

Relevant markets
Relevant market
Market 1
Market 2
Market 3
The EEA merchant market for base oils

The Market for motor fuel retailing in France
The Market for motor fuel retailing in Germany
Combined
marketshare (min)
40
Main findings in the first relevant market
Elimination of competition
Main findings in Market 1
Merger eliminates a potential future entrant:
Merger eliminates a recent entrant:
Merger eliminates a "maverick":
Merging firms are close competitors:
YES
Factors conducive to coordination

Factors
stable market shares:
Symmetric market shares post-merger:
Symmetric costs in the market post-merger:
Symmetric capacities in the market post-merger:
Transparency (easy to monitor competitors):
Deterrent mechanism (retaliation possible):
Past coordination:
Excess margins/profits:
NO
YES
Pre-merger
HHI
1100
Delta HHI
600-1600
28

Import competition:
Incentives for price increases
Incentives for price increases

Customers have large switching costs:
Capacity constraints (among competitors):
Inelastic demand:
Increasing industry/demand:
Declining industry/demand:
Fast technological development/innovation:
Historical abuse of dominance:
Entry barriers
Entry Barriers
High entry barriers:
New competitors cannot enter within two years:
New entry cannot defeat competitive concerns:
Scale economies prevent entry:
Essential facilities prevent entry:
Intellectual property rights prevent entry:
NO
YES
Non horizontal factors
Non-horizontal factors
Purchasing power:
Countervailing buyer power exist (among the merged entities' customers):
Likely input foreclosure post-merger:
Likely customer foreclosure post-merger:
Multi market contact:
Efficiency gains
Efficiency gains
Large efficiencies result from the merger:

Failing firm evidence (rescue merger, i.e. one of the parties is insolvent):
YES

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2014

UNIVERSIDAD AUTNOMA DE MADRID |

Horizontal Mergers: Exxon/Mobil

Universidad Autnoma de Madrid

Horizontal Mergers: Exxon/Mobil

The Merger ................................................................................................................ 9

Economic Implications ............................................................................................ 13

Results of the Union ................................................................................................ 22

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Case withdrawn - Phase 2

Case withdrawn - Phase 2

96% 96% 96%

Source: (European Comission, 2014)

Mineral fuels, oils, distillation products, etc

Source: (International Trade Centre, 2014)

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Source: (Etemad & Luciani, 2014)

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

It was also expected to reduce costs by the combination of administrative

Source: (Yahoo Finance, 2014)

Horizontal Mergers: Exxon/Mobil

The market value of Exxon by that time was

Market Value (billion)

Source: (Weston, 2002)

Table 2: Merger financial terms

Source: (Weston, 2002)

Horizontal Mergers: Exxon/Mobil

The more an industry is already characterized by the co-existence of factors

$ money of the day

Source: (BP, 2013)

Economies of scale or scope

Horizontal Mergers: Exxon/Mobil

Marketing and/or distribution rationalization

Increase Market Power

Source: own diagramming based on (Motta, 2004)

Horizontal Mergers: Exxon/Mobil

Relevant Product Markets: A relevant product market comprises all those

Own-price elasticity of demand: percentage change in the quantity demanded

Horizontal Mergers: Exxon/Mobil

Source: (Motta, 2004)

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil

Nigerian National Petroleum

Source: (Weston, 2002)

Table 5: HH Index after the Merger

Horizontal Mergers: Exxon/Mobil

Gas to Liquid technologies: The EU was concerned of a possible creation of

Horizontal Mergers: Exxon/Mobil

5. Results of the Union

Source: (Yahoo Finance, 2014)

Horizontal Mergers: Exxon/Mobil

Source: (Forbes, 2014)

Horizontal Mergers: Exxon/Mobil

Horizontal Mergers: Exxon/Mobil