Merger and Acquisition Strategies-Free-Samples-Myassignementhelp

Question: Analyze the Merger that is place between ADMA-OPCO and ZADCO. Answer: Introduction A merger took place between two oil-producing companies that is Abu Dhabi Operating Co. and Zakum Oil Development Co. The merger that took place will lead to a formation of a new oil company at the name of Abu Dhabi National Oil Co. Both the companies that are included in the merger are the offshore operating companies. In the merger the ADNOC holds 60 percent of the interest and other companies that holds the interest are BP PLC, Japan Oil and other. Both ADMA-OPCO and ZADCO were involved in the production and processing of crude oil. ADMA-OPCO produces crude oil from Lower Zakum, Umm Lulu and others, while ZADCO produces the same from Upper Zakum, Satah Fields and others (ArabianBusiness, 2017). The paper discusses about the merger that is happening between these two oil-producing nations. It further analyses the benefits that comes occurs due to the merger with some future recommendations. Discussion Merger and formation of ADNOC The merger usually takes place when two companies decide to form a new entity by sharing their operations and shares (Von Kalinowski, et al., 2016). The merger that took place between two oil producing company ZADCO and ADMA-OPCO was done to enhance the efficiencies of the companies. The merger that took place will facilitate and modifies operational performances of the company (The National, 2017). There merger was planned by the company in order to improve the operations of both the entities. In the merger, the overall operation of both the company will be dissolved and a new operating entity will be formed. The merger was decided with the aim that consolidating the operation of main offshore oil producing companies will not affect the fiscal term of the partners. The merger will be completed in 2018 by a steering committee and with some of its partners BP, ExxonMobil and others (Fareed Rahman, 2017). Benefits of the Merger The merger that takes place between companies has a lot of beneficial effect on the new company that is formed. Thus, merger takes place with the aim of getting the benefits after the merger (Ferris, Jayaraman, Sabherwal, 2013). Similarly, the two oil producing expected to get a lot of benefits from the merger that is being processed. The most important benefit that both the company will get from the merger is financial and operational benefit. After the merger, the bet operational tactics of both the company will be used to end up with the best production. Further, with best production the company will be able to earn better revenue and become financially strong. The operational performance of the consolidated firm will be enhanced and offer strategic benefits. The merger will not only unite the companies, it will also unite other aspects as well such as offshore experience, decision making and governance. Thus, a more upstream business and future growth will be formed with such a merger benefitting ADNOC, the consolidated company (ArabianBusiness, 2017). It is seen the consolidation also allows for the synchronization of various offshore fields used by the merging companies. Conclusion From the above analysis, it can be concluded that the merger will prove to be beneficial for both the oil producing companies and the new company that is being formed. Adnoc is benefitting a lot in its operation and financially by getting profitable returns from the merger. Th company has planed the merger with a well planned strategy and holds a 60 percent share in both the merging oil producing companies such as Zadco and Adma-Opco. Even though the merger is continuing and will be completed in 2018, yet the benefits from the merger can be seen on the process. Recommendation The merger will be beneficial on various grounds and as planned by the merging companies and new formed company, yet it could face some difficulties. The company is doing the merger for saving their cost; however, the company will be facing threat from the lowering price of the offshore oil. Thus, the company will face difficulty to cope up with the revenue compared to the cost, compared to the recent falling prices. Thus, it is necessary for the company to be strategic in their operations and compete successfully. Thus, the merger might prove to e a failure if such steps are not taken appropriately. However, keeping in mind the lowering prices the newly formed company should formulate a new strategy, while the merger is going on. It will be useful if the strategies are formed and they are ready to succeed before 2018. References ArabianBusiness.com. (2017). ADNOC plans to merge offshore oil firms in cost-saving measure. Retrieved 17 November 2017, from https://www.arabianbusiness.com/adnoc-plans-merge-offshore-oil-firms-in-cost-saving-measure-647683.html Fareed Rahman, S. (2017).Adnoc to integrate offshore oil firms amid drop in oil prices.GulfNews. Retrieved 17 November 2017, from https://gulfnews.com/business/sectors/energy/adnoc-to-integrate-offshore-oil-firms-amid-drop-in-oil-prices-1.1906947 Ferris, S. P., Jayaraman, N., Sabherwal, S. (2013). CEO overconfidence and international merger and acquisition activity.Journal of Financial and Quantitative Analysis,48(1), 137-164. The National. (2017). Adnoc combines its two largest offshore units, part of Abu Dhabi state oil firms streamlining efforts. Retrieved 17 November 2017, from https://www.thenational.ae/business/adnoc-combines-its-two-largest-offshore-units-part-of-abu-dhabi-state-oil-firm-s-streamlining-efforts-1.162610 Von Kalinowski, J. O., Sullivan, P., McGuirl, M., Folsom, R., Fine, F. (2016).Determining Legality and Defenses(Vol. 2). 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