Competitive Bidding and Acquisition: Chevron Case Study

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Competitive Bidding & Acquisition Q1.What are the lessons we can learn from here about hazards in acquisition decision making. From target point of view? From bidder point of view? From the boards point of view? The hazards in the acquisition, from all perspectives, can be best summarized by uncertainty; especially in regards to oil prices. From the targets perspective, most of the employees were offered jobs with the new company. Of the 6,400 employees, 5,000 were offered employment with the new company and virtually all of them accepted their offers. The chief executive of Unocal also stayed on to assist with the transition; however he was expected to leave later on after the merger was complete. However, the most uncertainty that was faced from the Unocal organization before the deal was complete was who was going to buy the company. There were several interested parties including the Chinese CNOOC who actually offered a higher price than Chevron. If the Chinese national firm would have purchased Unocal there would have undoubtedly been many changes that would have occurred in the company internally. However, members of Congress actually passed certain legislative barriers which were crafted to effectively block the Chinese firm from the deal. Oil reserves are of national security importance as well as their importance to the economy and Congress deemed it necessary to intervened in the market to ensure that a domestic company had control over these resources. This
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