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The World's Biggest Company

What happens when the biggest oil company in the U.S. decides to buy the second biggest oil company? The largest corporation in the world is created. And about 9,000 oil-company workers lose their jobs.

Last Tuesday Exxon announced that it would buy Mobil for $73.7 billion. The deal, or merger, would create a new company called Exxon Mobil. Mobil's winged horse and Exxon's tiger would still greet drivers at the pump. Gas stations would keep their separate names and signs.

By forming one company, Exxon Mobil could operate with lower costs and have fewer workers to pay. Company executives admit that low oil prices and falling profits led them to join forces. "The world has changed," said Mobil chairman Lucio Noto. "The easy things are behind us."

The average price of a gallon of gas was 97¢ last week--the lowest it has been since 1990. Gas prices are based on the cost of crude oil, from which gas is made. Today a barrel goes for around $11; it was $40 in 1990.

Exxon and Mobil once formed the biggest chunk of John D. Rockefeller's Standard Oil company. In 1911 the Supreme Court forced the giant company to split up. It ruled that one company could not control the nation's oil and set the prices. That's called a monopoly.

Exxon and Mobil say their new company would not be a monopoly because it would control just 14% of U.S. gas sales. Still, a court may end up deciding whether the merger should be allowed.

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