Beyond Exxon: Why a desperate mega-merger with BP might finally make sense
Political, environmental and market factors are conspiring to haul an unlikely transatlantic tie-up into the realm of the possible
Spare a thought for ExxonMobil shareholders. While the S&P 500 has rebounded from April’s Covid crash to hit a series of all-time highs this autumn, XOM stock is still down 40% year-to-date despite the recent vaccine-inspired market euphoria that has lifted Brent crude back above USD 50 per barrel.
This year has been indiscriminately cruel to oil stocks, but the way the pandemic has humbled Exxon has been a spectacle to behold. This once-proud US supermajor has gone from being the world’s most valuable company as recently as 2013 to flunking out of the Dow Jones Industrial Average this year, after limping to three consecutive quarterly losses. To offset in Q4’20 the USD 2.37 billion of losses accumulated over the previous nine months to finish the year in the black seems an impossible task.
But these are merely vanity metrics for Exxon investors, who tend to care about only one thing: the gold-plated XOM dividend. The company failed to raise the payout for the first time since 1982 fo…