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Summary
- Exxon and Chevron initiated their merger discussion last year, as per multiple media reports.
- Both oil companies may resume talks in the future.
- Stocks of both the energy giants declined last year due to volatile global oil prices.
- Stocks of Exxon has recovered almost 8 per cent in 2021. The oil company is expected to release its Q4 earnings on Tuesday, February 2.
Two largest US oil companies Exxon Mobil Corporation (XOM:US or NYSE: XOM) and Chevron Corporation (CVX:US or NYSE: CVX) pursued merger talks in early 2020, media reports indicated. The early-stage talks were led by Exxon chief executive officer (CEO) Darren Woods and Chevron CEO Mike Wirth.
The talks could resume in the future, people familiar with the subject said.
The oil market witnessed the worse year in decades as WTI futures nosedived to negative in 2020. On top of that, the new US President, Joe Biden, has already prioritized tackling climate change and endorsed employment in the renewables industry vis-à-vis conventional energy options such as oil and gas.
While both energy giants halted their conversation last year amid the COVID-19 outbreak, Chevron purchased oil producer Noble Energy for a US$ 5 billion cash-and-stock transaction that concluded in October 2020.
Let us glance at the market fundamentals of both the companies:
Exxon Mobil Corporation (XOM:US or NYSE: XOM)
Chevron Corporation (CVX:US or NYSE: CVX)
If both large cap companies merge, their combined market cap will stand at approximately US$ 353.6 billion. Exxon is paying a quarterly dividend of US$ 0.87 per stock, with the current growth of 7.761 per cent. Chevron is distributing a dividend of US$ 1.29 per common share at the same time, with dividend growth of 6.056 per cent.
Image Source: Kalkine Group @2021
Exxon’s shares have plummeted by 22 per cent in one year, but its scrips have gained almost 8 per cent year-to-date (YTD). Meanwhile, the stock of Chevron has fallen by 16 per cent in last one year and it has traded flat YTD.
Exxon is likely to announce its fourth-quarter earnings on Tuesday, February 2. Chevron reported its fourth quarter results last week with an US$ 11 million quarterly loss, steered by low price margins on fuel and purchase expenses.
