Corporate takeovers and petroleum-industry restructuring
A controversy over the merits and methods of corporate takeovers has developed recently in the petroleum industry. The successful takeover or merger depends on the efficient use of available financing and careful management of employees. The difficulty in assessing the value of a corporation and the undervaluation of oil-industry stock has enticed speculative buyers (raiders) into takeover attempts. The current tax code encourages takeovers while government legislation proposals attempt to eliminate wasteful ones. Defensive tacts used by corporate managements to discourage raiders raise questions about shareholder and employee rights. Leveraged buyouts have encouraged takeover activity because cash is obtained easily through investor groups. Eight approaches to financing have been used consistently by industry. Six of these financing methods use cash that is raised from debt securities or loans. Financial direction in the oil industry is toward cost cutting, profitability, and wise investing. Finding oil is important, but a company must also remain competitive and increase its assets to survive. A review of oil companies affected by the current merger activity indicates that those companies entering into merger agreements in the last 2 years have experienced asset gains, but they also have suffered revenue, income, budget, and stockholder equity losses.
- Research Organization:
- Montana College of Mineral Science and Technology
- OSTI ID:
- 5648788
- Journal Information:
- J. Pet. Technol.; (United States), Vol. 38:5
- Country of Publication:
- United States
- Language:
- English
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PETROLEUM INDUSTRY
ECONOMICS
BUSINESS
COMPETITION
COST
FINANCING
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PERSONNEL MANAGEMENT
PROFITS
TAX LAWS
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