...in order to avoid extinction and stay relevant in the market in which they operate. In this paper I will analyze the reasoning behind the 1981 purchase of Conoco by DuPont which at the time was the largest takeover in U.S. history with a 1981 value of 7$ billion (Rubank,1982). I will also analyze the financial effects of the takeover on both firms. In conclusion there will be review of the information that supports a two-stage divestiture of Conoco. Corporations do not often make decision on a whim and often have months or maybe years of evidence and findings to back up significant business ventures. The use of a divesture as a restructuring method is a decision made by a corporation for many reasons. These reasons can include the firm having a subsidy that is not profitable. Another reason is that it want to let go of an element that is not in line with its core operations or mission. The funds that would result from a sell-off of the unit is also a huge motivator. These funds could be used to expand the core operations. DuPont’s takeover of Conoco did not start from one initial offer to buy a majority share of the firm. In May 1981 Conoco was taken over by Dome Petroleum Ltd. Management opposed this offer and the deal all together but it still happened. In June of the same year Conoco was able to sell off assets and gain its interest back from Dome. Since management had opposed the deal from the beginning they sought other bids in order...
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...Benchmarking ………………………………………….. 5 4.4 Accounting Standards ………………………………………………………. 5 4.5 Common size Income Statement …………………………………………. 6 4.6 Benchmarking with Financial Ratios ………………………………………. 7 4.7 Business Segments ……………………………………………………………. 19 4.0 Issues ……………………………………………………………………………………. 22 5.0 Recommendations ………………………………………………………………… 23 6.0 Conclusion …………………………………………………………………………... 24 7.0 References …………………………………………………………………………... 25 Appendices Appendix 1 – Key Financial Data for COP, XOM and CVX Appendix II – Financial Ratios 1.0 Executive Summary ConocoPhillips has grown into the 3rd largest Integrated Oil and Gas Company in the US ever since the merger of Conoco and Phillips Petroleum in 2002. Since then, its market capitalization has grown 5 times to US$ 101 Bil with an asset base of US$155 Bil. This report provides an insight to the Board of Directors of the financial performance of ConocoPhillips since 2002 and will be benchmarked against competitors in the industry to give a cross sectional analysis. Whilst the growth of ConocoPhillips has been impressive over the last 10 years, earnings have not performed according to its peers in the industry. During this period, the Company had reported several impairments to its major assets and its earnings were eroded by the volatility of the crude oil and natural gas prices. These results have also unfolded some new challenges to Company in terms...
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...mF OXFORD INSTITUTE O R I ENERGY STUDIES The Effects of Vertical Integration on Oil Company Performance Fernando Barrera-Rey Oxford Institute for Energy Studies WPM 21 October 1995 The contents of this paper are the author's sole responsibility. They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members. Copyright 0 1995 Oxford Institute for Energy Studies All rights reserved. No palt of this publication may be reproduced, stored in a retrieval system, or transmitted in any fomi or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior pemiission of the Oxford Institute for Energy Studies. This publication is sold subject to the condition that it shall not, by way of trade or otherwise. be lent, resold, hired out, or otherwise circulated without the publisher's prior consent in any fonii of binding or cover other than that in which it is published and without D similar condition including this condition being imposed on the subsequent purchaser. ISBN 0 948061 90 1 ABSTRACT When asked to rank industries by their degree of vertical integration, most people would agree that the oil industry should come top of the list. Underlying this belief is the fact that integration and size tend to be closely associated. As the oil industry is so large and oil companies so visible and perceived as so profitable, the common belief is a correlation between vertical...
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...ЖУРНАЛ "КОРПОРАТИВНЫЕ ФИНАНСЫ" №1(5) 2008 12 Оценка эффективности сделок слияний и поглощений: интегрированная методика Хусаинов З.И.4 В работе исследуется изменение котировок и финансовых результатов компаний при сделках слияний и поглощений. Анализ значительного массива сделок с публичными компаниями с 2005 года во всем мире показывает взаимосвязь между реакцией рынка на информацию о сделке и последующей динамикой финансовых показателей объединенной компании через два года после сделки. Степень связи варьируется в зависимости от развитости фондовых рынков, размеров компании и прочих качественных показателей. JEL: G14; G15; G24; G34 Ключевые слова: cделки, слияния и поглощения, акции, котировки, рыночная эффективность Введение В последнее время в мире, в том числе и в России, наблюдается стремительное увеличение числа и объемов сделок слияний и поглощений. Интеграционные процессы изменяются структурно, в них вовлекается все большее число регионов и расширяются масштабы межнациональных сделок. Для бизнес-сообщества данные процессы имеют ясную логику, поскольку предполагают очевидную экономическую мотивацию: расширение рынков сбыта, производственную синергию, финансовые выгоды, то есть факторы, ведущие к увеличению стоимости собственного капитала. Однако для исследователей данная тема до сих пор остается незавершенной. Вопервых, несмотря на большое количество работ, наблюдается очевидный пробел в качественных выводах, и эта проблематика в классических работах по корпоративным...
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