The heads of Exxon and Chevron discussed the possibility of a merger last year, the Wall Street Journal reported, quoting its own sources. Mike Wirth and Darren Woods held preliminary talks last year, raising the possibility of bringing together the two companies.
No discussions are going on at the moment. But that does not mean that they will not return to the matter in the future.
It could well have been the biggest such deal in history. Exxon’s capitalisation stands at $190 billion and Chevron’s at $164 billion. A merger could have created a company with an overall value of $350 billion and production capacity of hydrocarbons of 7 million barrels. That would put the company in second place in the world in terms of capitalisation and production, behind only Saudi Aramco.
Exxon and Chevron are successor companies to John Rockefeller’s Standard Oil corporation. In 1911, Standard Oil was judged to be a monopoly and broken up.
It cannot be ruled out that the U.S. regulators of today could also rule against the creation of the new company. But U.S. corporations have arguments in favour of a merger: It is quite possible that only a merger in the current uncertainty would help the U.S. companies withstand a price war with large foreign oil producers, like Saudi Arabia or Russia.