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Exxon and Chevron Talked Merger - Senator Voices Concerns

Sen. Amy Klobuchar voices concerns about the reported merger talks between Exxon Mobil and Chevron.
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Minnesota Sen. Amy Klobuchar on Monday raised concerns about reported merger talks between oil giants Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report and Chevron  (CVX) - Get Chevron Corporation Report.

“Mergers like these are being considered for one obvious reason: the lawmakers, regulators, and courts have allowed increased consolidation in industry after industry,” Klobuchar, a ranking member of the Senate antitrust subcommittee, said in a statement. 

Exxon Mobil shares were down slightly to $44.75 on Monday, while Chevron was down modestly to $84.99.

The chief executives at Exxon Mobil and Chevron discussed a merger of the two oil companies last year after the coronavirus pandemic devastated oil and gas demand, according to The Wall Street Journal. 

The talks, the Journal said, were preliminary and aren't continuing.

A merger between the two companies would yield a company with a market capitalization greater than $350 billion.

Chevron reported a surprise fourth-quarter loss last week as costs linked to its acquisition of Noble Energy and revenue tumbled amid coronavirus-triggered shutdowns for factories around the world.

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“2020 was a year like no other,” said Chevron CEO Mike Wirth.

Exxon Mobil is scheduled to report fourth-quarter earnings on Tuesday.

Last month, the Houston Chronicle reported that more than 100 oil and gas companies had gone bankrupt in the wake of the pandemic shutdown.

The oil industry also faces pressure from governments seeking to combat climate change.

President Joe Biden recently signed a series of executive orders designed to address climate change.

Oil companies have been turning to mergers and acquisitions to survive the pandemic.

In October, ConocoPhillips  (COP) - Get ConocoPhillips Report agreed to acquire rival Concho Resources  (CXO) - Get Concho Resources Inc. Report in an all-stock deal valued at $9.7 billion.

Chevron acquired Noble Energy that same month for $4.1 billion.