Essay on Week 5 - You Decide - Project

2125 Words Jun 28th, 2014 9 Pages
DuPont Divestiture of Conoco

Student Name:
Course ID: FIN561 Merger & Acquisition
Assignment ID: Week 5 - You Decide Project
Instructor: Jeffrey Hardin
Date: November 29, 2013

Table of Content
Executive Summary……………………………………………………………………………………………….3

Executive Summary

1.0 Background

The divestiture of Conoco by DuPont also reflected changing conditions in the energy industry. As noted in a May 12, 1998, article in the New York Times: DuPont bought the oil company in 1981 as insurance against the pricing and supply tactics of the Organization of Petroleum Exporting Countries. But oil prices have been far less volatile than it feared, and DuPont continues to de-emphasize the petrochemical side of its
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Q2. WHY DID DUPONT CHOOSE THE EXCHANGE OFFER AS THE WAY TO SEPARATE
CONOCO?

A2. DuPont believes the exchange offer is a tax efficient way to achieve the goals outlined above. It allows you to adjust your investment between DuPont and Conoco on a tax-free basis and provides you with the opportunity to receive the anticipated premium referred to in question 11.
Q5. HOW MANY SHARES OF CONOCO CLASS B COMMON STOCK WILL I RECEIVE FOR EACH
SHARE OF DUPONT COMMON STOCK THAT I TENDER?

A5. You will receive 2.95 shares of Conoco Class B common stock for each share of DuPont common stock that you validly tender in the exchange offer. This is sometimes referred to in this document as the exchange ratio.

2.0 Companies Overview
CONOCO INC. Conoco is a major, integrated, global energy company operating in 40 countries worldwide. Conoco was founded in 1875 and acquired by DuPont in 1981 and is involved in both the upstream and downstream operating segments of the petroleum industry. Upstream

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