Chevron Texaco Merger

What do you think the real reasons for Chevron Texaco optical fusion be? Unlike previous coalitions in the vegetable oil industry, it appears that the Chevron-Texaco merger was instigated much from a lack of size, than from a financial advantage. The cardinal companies on a stand-alone basis could not effectively struggle with the merged might of the likes of BP Amoco Arco, Exxon Mobil and TotalFinaElf. There is some trueness to oil managements arguments that they can increase cost-cutting and efficiency by merging. particularly in the area of exploration and work, where in new frontier areas such as the former Soviet Union, risks are high both(prenominal) because of political and economic ciphers, such mergers increase the pool of large(p) unattached to one firm to satisfy such high risks. maculation it is less true in refining and marketing, mergers and union ventures do allow economies of scale, through building new facilities on a larger scale or by shimmy production to one refining facility while shut piling another. However, the essence of such economies of scale is the reduction in the tot of labor needed to produce a given all over amount of output. The Chevron Texaco merger might also take over been motivated by managements assume perspectives.

cover management probably saw in this merger the probability to get larger salaries and golden parachutes that would secure whatsoever accomplishable future outcome of the merger. According to a bead Meyer & adenosine monophosphate; Partners study of the covering 200 U.S. companies, 90 percent of a CEOs pay is tied to p erformance, and much than half of that pay ! is in stock-option grants. Its no longer unusual for the CEOs equity stake to outgo $100 million, and mergers often involve sizable new grants and come apart up major(ip) windfalls. Ego could be a major factor in driving mergers, as executives privation more recognition, more... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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