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: Exxon to combine chemical, refining business in major cost-cutting reorganization

Exxon Mobil Corp. on Monday unveiled sweeping changes in the way it does business in order to cut costs, combining its chemicals and refining divisions under one umbrella and moving its headquarters to Houston.

Exxon XOM, +0.90% shares rose 0.5% after the news, which came ahead of the company’s scheduled fourth-quarter earnings on Tuesday before the bell.

Exxon will realign itself in three business lines, effective April 1: ExxonMobil Upstream Company, ExxonMobil Product Solutions, and ExxonMobil Low Carbon Solutions, the company said. One technology group and other centralized service-delivery groups will serve all three, it said.

Product Solutions will “engineer, manufacture and deliver products needed by modern society,” with an eye toward developing “more sustainable products,” Exxon said.

Exxon’s chemicals business has been a profitable highlight in recent quarters, and refining and other downstream activities are the bulk of Exxon’s sales.

Exxon said it was on track to reach $6 billion in cost savings by 2023, as compared with 2019, thanks to savings from the new business structure.

The company said it will relocate its corporate headquarters from Irving, Texas, to its campus north of Houston, as it seeks “further collaboration and integration.” The move is expected to be completed mid-year 2023, Exxon said.

Exxon stock has gained 68% in the past 12 months, compared with gains of around 20% for the S&P 500 index SPX, +1.89% in the same period.

Analysts polled by FactSet expect the energy giant to report adjusted earnings of $1.94 a share on sales of $88 billion on Tuesday, which would compare with adjusted EPS of 3 cents a share on sales of $47 billion in the fourth quarter of 2020.

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