Rumors have been circulating in
financial circles that BP plc. (BP) might be acquired by Exxon Mobil
(XOM). Here we look at the possibility of such an acquisition and
reasons why Exxon would make a move for the British oil giant.
It goes without saying that BP is past
its glory days. The Macondo incident in April 2010, also known as the
Gulf of Mexico oil spill, has left BP in a crippling situation.
The
company has already spent around $50 billion since 2010 on fines, new
regulatory requirements and cleaning costs. Its market capitalization
has fallen around 30% since the incident, making it the least valuable
of the world’s five biggest non-state oil companies. Meanwhile, the
market capitalization of Exxon, Chevron (CVX) and Royal Dutch Shell
(RDS) has risen by 18%, 38% and 11% respectively since 2010. The rumors
are not unwarranted; it might be the perfect time to buy BP, now that
its down and out. Read more XOM.
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