Why do most mergers and acquisitions (M&A) fail to create value for the acquirer ’s shareholders? What are the main reasons in your opinion? Identify the difference between a good company and a good investment Most of publicly traded companies’ mergers destroy value for buy-side shareholders and at the same time sellers are compensated with premiums1. The same opinion is stated in one of the most quoted book about valuation and creating value: most of M&A deals don’t create value for buyers2
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1. E. I. du Pont de Nemours and Company ( DuPont) E. I. du Pont de Nemours and Company commonly referred to as DuPont‚ is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont was the world’s third largest chemical company based on market capitalization and ninth based on revenue in 2009. Its stock price is a component of the Dow Jones Industrial Average. In the 20th century‚ DuPont developed many polymers such as Vespel‚ neoprene
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Venezuela’s state oil company and operates in Venezuela • If Venezuela defaults on its debt Petrozuata will default too unless… • Conoco Inc. is a subsidiary of DuPont which operates worldwide and has investment grade rating • Investing in Petrozuata is indirectly investing in DuPont • If you invest in Petrozuata your real investment is also in Venezuela and DuPont • Petrozuata project has a very good structure and business projections • Same comparables with other oil companies operating in other
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B.A. 142 CASE 2 EXECUTIVE SUMMARY E. I. du Pont de Nemours is an American chemical company that has recently acquired the major oil company of Conoco Inc. and is becoming one of the largest chemical manufacturers in the United States. Its financial conservatism has pushed Du Pont to the forefront of the industry as its profitability soared‚ providing it with the liquidity to readily finance its cash needs. But several competitive conditions posed a challenge to its risk averse financial
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References: Asquith‚ P. 1983. Merger bids‚ uncertainty‚ and stockholder returns. Journal of Financial Economics 11 (April): 51-83. by saying‚ I think we are justified in doubting .. . the argument that mergers are done to maximize stockholder wealth." Foster (1983) seems to share this view or at least the view that bidders make big mistakes. Larcker (1983) presents interesting
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Petrozuata would become a stand-alone entity‚ with the sponsors warranty coming to an end Non-recourse debt = at completion the project debt would also become non-recourse to the sponsors. Sponsor holding most of the equity are also suppliers/customers = Conoco would purchase the first 104‚000 BPCD from Petrozuata upon production‚ Single purpose capital asset = While the project was an integrated facility of production‚ transportation and refining‚ the main purpose was to sell syncrude. Finite life = Petrozuata
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Evaluation of Petrolera Zuata‚ Petrozuata C.A. Project Finance Case Study 1 Table of Content Petrozuata introduction ....................................................................................................................... 4 1. How should PDVSA finance the development of the Orinoco Basin? What are the costs and benefits of using project finance instead of traditional internal debt finance? ...................... 4 1.1. Project finance scenario (BBB) ...............
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ROI Project: Phase #1 Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Like it or not‚ with the current state of the economy‚ as well as‚ enforced implications of the Affordable Care Act‚ a large number of hospitals and healthcare agencies will close their doors for good this year. Perhaps
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Conoco‚ Incorporated was an American oil company founded in 1875 as the Continental Oil and Transportation Company. The company was originally based in Ogden Utah‚ and was a distributer of coal‚ oil‚ kerosene‚ grease‚ candles‚ and a number of other resources in the industry. Since the corporation’s creation it has risen in the ranks and become one of the largest oil providers in the country. ConocoPhillips was created on August 30‚ 2002 through the merger of Conoco‚ Inc. and Phillips Petroleum
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Organizational Social Responsiveness from CSR perspective Introduction This paper will first briefly discuss the CSR theory by reviewing its development history. Focus will then be paid on the study of organizational social responsiveness‚ which includes two basic processes‚ namely first monitoring external social demands and expectations and then developing internal social mechanisms (Bartol‚ 2011). To be more precise‚ the author would like to study the social responsiveness from a CSR perspective
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