Exxon Mobil acquired XTO Energy Inc. in 2010

As we have learned, M&A to be a form of investment, benefits acquirers enhancing their market power, taking tax advantage aspects, and increasing their probability. Exxon Mobil, the largest multinational oil and gas company in U.S. bid XTO Energy paid all stock transaction which valued nearly $41 billion. Is really benefit about this acquisition to Exxon Mobil Corporation?

 First, XTO Energy provided reserves 54% natural gas and 47% oil for a total of $24.8 billion oil-equivalent barrels in 2010. Through Exxon Mobil bid with XTO, Exxon Mobil's reserves additions in 2010 were the highest since the merger of Exxon and Mobil in 1999. Exxon Mobil has to cut their annual capital spending up 6% to $34 billion this year due to the financial crisis in U.S. However, Exxon Mobil still gain the benefits from their operation turnover which one part comes from high quality projects and the successful integration of XTO. The CEO of Exxon Mobil said production volumes growth of XTO made their forecast which was increase their production between 2% to 3% a year from 2009 to 2013 became true.

Secondly, as Hutton who was former CEO of XTO claimed that “XTO’s employees bring the ability to enhance ExxonMobil’s global operations through the vast experience they have gained in innovative and efficient resource development in the United States.”  This was enhancing the global development capability from XTO for Exxon Mobil.

Thirdly, XTO could provide the production of unconventional resources to Exxon Mobil to instead of their conventional resources which have to explore from deep water well drilling. A rig drilling for their rival European oil company BP in the U.S Gulf of Mexico exploded which caused 11 people killed and the worst marine oil spill in the history. So Exxon Mobil had to wait the government solve this issue to permit them drill exploratory deep water wells. They continued confirmed that deep water operations were not an issue for this industry. They wish government back the confident to deep water operations.

The value of stakeholders stands the same position as their shareholders in the company. As Exxon Mobil Senior Vice President said the "company 'fully expects' that its unconventional assets will provide material production growth and attractive returns for shareholders." M&A action are not only consider the benefit for the two sides company, but also the environment of society and the public benefits.