Rumor Mill Churns Around Possible Exxon-BP Merger
NEW YORK — New rumors are swirling that say Exxon Mobil Corp. could buy BP plc, reported Bloomberg Business. Speculation arose this week after Exxon sold $8 billion of debt in its biggest-ever bond offering.
Exxon Mobil previously marketed $7 billion of debt, but increased the deal by approximately 14 percent to $8 billion, an anonymous source told the news outlet. Proceeds from the bond sale may fund general corporate purposes such as a BP acquisition, as well as capital expenditures and refinancing.
The company issued securities as a combination of fixed- and floating-rate notes in a seven-part sale.
The rumored deal would consolidate the two major players' presence in the Houston region. Exxon Mobil is the second-largest energy employer in the area, while BP North America Inc. is the fifth-largest energy employer there.
The debt sale was likely motivated by the low cost of borrowing and preparation for the future, said one income strategist.