It was reported on Tuesday that Exxon Mobil Corporation (NYSE:XOM) will sell its 60% share in Hong Kong’s company for power generation. The deal for the sale will be over $3.2 billion.
The major reason for this deal is that Exxon, the leading oil company in the world, had a disappointing third quarter profit results according to which the company suffered an 18% fall in its profits. This decline was primarily due to weak earnings for refining.
Exxon spokesperson announced that China Southern Power Grid (CSG) and CLP Power will buy Exxon’s 60% share in the power generation company. The purchase of the 60% share from Exxon was confirmed by CSG and CLP Holdings. It was announced through a statement by both the companies that each will purchase half of Exxon’s 60% stake.
With this purchase stake of CLP in the company will rise up to 70% whereas CSG will own 30%.
Exxon was criticized for investing too much money into new projects last year as a result of which the company’s production suffered. This caused shares of Exxon to “Underperform”.
According to the spokesperson this sale was part of the Exxon’s annual global portfolio assessment and this sale is just another opportunity to grow and restructure the company to achieve its strategic objectives.
CLP Holdings announced that it is purchasing its half of the stake for a value of HK$12 billion that is equal to $1.55 billion in the US currency whereas CSG’s purchase amount has not been announced.
It was also announced that CLP Holdings will also buy Exxon’s 51% share in “Hong Kong Pumped Storage Development Company”; the buying amount will be equal to $2 billion in Hong Kong currency.
In the premarket, shares of Exxon Mobil Corporation (NYSE:XOM) went down by -0.02% ($95.43).