If Exxon were to acquire BP, what would be the outcome?
Here are the guidelines......Do not need responses for the entire 1-10. just 6-9
Project -- Actual Merger
1. Building the Business Plan
a. External Analysis
b. Internal Analysis
c. Define mission statement
d. Business strategy
e. Implementation strategy
f. Functional strategy
g. Establishing strategic controls
2. Acquisition Plan
b. Resource/capability review
c. Management preferences
d. Search plan
e. Negotiation strategy
f. Determine initial offer price
g. Financing plan
h. Integration plan
3. The Search Process
a. Initiating the Search
b. Brokers and Finders
4. The Screening Process
a. Market Segment
b. Product Line
d. Degree of Leverage
e. Market Share
f. Cultural Compatibility
5. First Contact
a. Alternative approach strategies
b. Trust and relationship building when time is not critical
c. Discussing value
d. Preliminary legal documents:
i. Confidentiality agreements
ii. Term sheets
iii. Letter of intent
a. Negotiating strategy
b. Concurrent activities
7. Developing the Integration Plan
a. Use due diligence to determine post-closing sequencing of events necessary to realize potential savings and revenue enhancements
b. Resolve contract-related transition issues in purchase agreement
c. Ensure contract closing conditions include those necessary to facilitate integration (e.g., employee contracts, agreements not to compete)
d. Develop post-merger integration organization consisting of both target and acquirer managers
a. Obtain all necessary consents
b. Complete definitive agreement
9. Implementation Postclosing Integration
a. Communication plans
b. Employee retention
c. Satisfying cash flow requirements
d. Employing best practices
e. Cultural issues
10. Conducting a Postclosing Evaluation
M&A: Exxon & BP
The negotiation strategy is used to resolve disputes in making a decision. The negotiation process is used as the decision of Exxon will affect BP while the decision of BP will affect to Exxon. The negotiation process requires an effective negotiation strategy that is effective to meet the underlying objectives and interests of an organization (Guasco & Robinson, 2007).
The following negotiation strategy should be followed by the management of Exxon to acquire the BP -
Establish a special negotiation committee: In the first step of negation strategy, the board should establish a special negotiation committee including experienced board members and negotiators. The goals and objectives of the negotiation committee should also be clear so that the members could work in their best interest and can identify the fundamental goals.
Engage competent advisors: The next step in negotiation strategy is to include the appropriate and competent advisors in the committee that would be effective to assist them for major and sensitive matters. It would facilitate a conscientious, transparent and informed decision making.
Eliminate conflict of interest: In this step, the actual and potential conflict of interest will be spotted by asking all individuals and entities involved in transaction. The identified conflicts should also be considered carefully and without biasness (Kimathi & Kimathi, 2010).
Determine best price: It is also essential for an effective negotiation to determine the best price of the BP to acquire it. The review of historical & present business and financial results, financial forecast based on some information, review the market value of assets etc. will be effective to determine the appropriate price for the acquisition. It will also be effective to identify the issues and objectives in the negotiation.
Establish negotiation priorities & potential tradeoffs: The negotiation issues should be ranked relatively in order to the importance for Exxon. After it, the tradeoff positions that are acceptable should be identified that would cause an increase in the effectiveness of negotiation process.
Determine an appropriate negotiation approach: In this step, the strategy that is most effective to accomplish the priorities and objectives of Exxon should be selected (Harris, 2009). The planning to resolve the issues should also be used.
Contract implementation (Close of Walk away): It is the last process that ended with the smooth contract process between both the parties.
The negotiation phase in the merger & acquisition decision includes four largely concurrent activities. The final decision of walk away or to close is the result of these four activities. Following are the concurrent activities -
Refine valuation: This activity deals with the updating of target company valuation based on available information. The 3 to 5 year historical financial data of BP will be assessed by the management of Exxon. The nonrecurring gains, losses and expenses will be normalized that would be effective to refine the valuation (DePamphilis, 2009).
Deal restructuring: This activity includes the allocation of cash flow streams, risks among the different parties to the transaction. Exxon and BP both will identify and satisfy their priorities and objectives in the transaction with a level of risk tolerance. This activity also helps to identify the potential areas and sources of disagreement. This process affects various attributes of the deal that causes an increase in the effectiveness of purchase decision.
Perform due diligence: This activity includes the accurate ...
The outcome which would acquire Exxon BP.