Chevron Texaco Merger

What do you think the real reasons for Chevron Texaco jointure be? Unlike previous unions 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 in effect 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. particularly in the area of exploration and achievement, 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) operational to one firm to dispense such high risks. objet dart 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 pr oduction to one refining facility while shut downwards another. However, the essence of such economies of scale is the reduction in the occur of labor needed to produce a given everyplace amount of output. The Chevron Texaco merger might also take over been motivated by managements earn perspectives.

cover management probably saw in this merger the probability to get larger salaries and golden parachutes that would secure any accomplishable future outcome of the merger. According to a os Meyer & adenosine monophosphate; Partners study of the covering 200 U.S. companies, 90 percent of a CEOs pay is tied to performance, and more(prenominal) than h! alf of that pay is in stock-option grants. Its no longer unusual for the CEOs equity stake to excrete $100 million, and mergers often involve sizable new grants and branching up major 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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