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ExxonMobil could use big cash hoard to make large acquisition

ExxonMobil, (NYSE:XOM), the Irving, Texas-based oil and natural gas producer and petrochemicals concern, has unparalleled financial flexibility to make an acquisition, Barron’s wrote in an online blog Tuesday (19 May), citing Oppenheimer’s Fadel Gheit and Luis Amadeo.

ExxonMobil will likely capitalize on its competitive advantage by making a large acquisition in the current oil downturn to make up for the XTO purchase, which proved to be disappointing, Barron’s reported, citing Gheit and Amadeo.

ExxonMobil is the only AAA-rated company among its peers, according to Gheit and Amadeo.

The recent dividend increase and expected USD 1bn share buy-back in the second quarter of this year underscores ExxonMobil's confidence and reassures its shareholders that it is different and a cut above the rest, Gheit and Amadeo said, according to Barron’s.

ExxonMobil has a current market value of more than USD 320bn, or about 59% above the market capitalization of its largest competitor, according to the report. It coul dtheoretically acquire any company in any of its business segments, conditional on regulatory approval, Barron’s wrote, citing the analysts.

The report didn’t identify potential targets.