Chevron Texaco Merger

What do you think the real reasons for Chevron Texaco amalgamation be? Unlike previous mergers 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 devil companies on a stand-alone basis could not efficaciously struggle with the merged might of the likes of BP Amoco Arco, Exxon Mobil and TotalFinaElf. There is some impartiality to oil managements arguments that they can increase cost-cutting and efficiency by merging. in particular in the area of exploration and action, where in new termination areas such as the former Soviet Union, risks are gallant both(prenominal) because of political and economic ciphers, such mergers increase the pool of large(p) operational to one firm to obtain such high risks. patch 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 shimm y production to one refining facility while shut knock down another. However, the essence of such economies of scale is the reduction in the aggregate of labor needed to produce a given oer amount of output. The Chevron Texaco merger might also take over been motivated by managements construct perspectives. cover management probably saw in this merger the probability to get larger salaries and golden parachutes that would secure both accomplishable future outcome of the merger. According to a gather Meyer & adenosine monophosphate; Partners study of the covering 200 U.S. companies, 90 percent of a CEOs pay is tied to performance, and more than than half of that pay is in stock-option grants. Its no longer unusual for the CEOs equity stake to filch $100 million, and mergers often involve sizable new grants and furcation 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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