Royal Dutch Shell also known as Shell, completed its acquisition of BG Group on 15 Feb 2016 with end up negotiation with $70 billion to take over BG Group. The defenses raid start since year 2015. Many people think that Shell act to take over BG is not a good trend because the BG is getting bigger and bigger, many others oil company like Chevron Corporation, ExxonMobil Corporation which is one of the biggest and famous oil company are give up to take over BG, because BG is very expensive, even BG got great resource and nice potential to make their company roses. In long term investing, Merger arbitrage and trading isn’t usually the bad way but by buying into the BG-Shell deal, not only do investors stand to profit from the merger, they’ll …show more content…
In case, BG Chief Executive Helge Lund and other directors have contracts which entitle them to receive a year’s salary plus 30 percent in lieu of pension if they leave following a takeover.With a salary of 1.5 million pounds, this means that if the deal closes in early February 2016, and Lund departs, he will have received almost 2 million pounds in pay and pension for his first year, Lund assume this as golden parachute. He also has an annual bonus plan -- whose payout is linked to the share price, which jumped 35 percent following the Shell approach -- worth up to two times salary. According to Lund’s remuneration package at BG, he is allowed to get a base salary of £1.5 million, fixed for the first five years of employment. Also, Lund could get a 130% of salary on termination of the contract, expected to happen in early 2016, once the Shell-BG transaction is completed, and according to website, Reuters, Lund could receive as much as 32 million pounds ($47.8 million) by the time he is out of BG.
Mr.Warren East was the Chief Executive Officer of the ARM Holdings PLC from 2001 to 2013.He joined the company in the year 1994 as a general manager of the design consulting business unit. Before he became the Chief Executive Officer of the company, he became the vice president of Business Operations for three years.
General Motors has made great progress towards diversity however, it took the lawsuit in order for the company to do so. Adding females and minority to the upper management. Had the HR department of General Motors followed the EEOC regulations, this lawsuit could have been avoided.
The $55 value is on the lower range of the analyst eztimates, with a best guess estimate of $67.94. Since the value of the stock had been below $45 for 4 months, the offer of 55 dollars represented a 29% premium to investors. Bollenbach knew that management would be resistant of any attempt to be acquired, regardless of price, because of failed previous attempts to negotiate a friendly merger at year end 1996. The 55-dollar benchmark created an expectation for ITT management to achieve that level, or higher and the premium is enough to demonstrate to investors it is a real offer. Their support will be key as they will have a vote deciding the fate of the poison pill provisions which need to be removed to make the deal necessary.
Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are at stake? Is it fair for the rich to get richer when numerous employees below top executives are dealt the same fate from a merger and shareholders’ investments are at risk but neither receive a form of additional compensation? Of course, there’re those who support the issuance of golden parachutes, arguing they can persuade a possible company merger to not take place due to the costs associated with a top executives golden parachute package. Another supporting point for golden parachutes is, they can make it easier for higher up executives, like CEO’s be absorbed into the future merged company. I will be addressing the point of whether CEO’s and other executives deserve to be awarded a Golden Parachute option by their company. As well as a brief background of Golden Parachutes and my stance on them. They’re a very important part of our growing economy and will always be considered in a merger/takeover if awarded to executives.
West (2016) suggested, “Deals have about 50% chance of long-term success when market was initially sceptical,” meaning that initial market reaction is less reliable as it is exposed to biases and incorrect valuation. On average, the acquirer’s gains are zero, target’s gains are significantly positive, and overall takeover yields positive gains. To identify the market reaction towards an acquisition financed by stocks, external drivers such as CAR, tax, merger type, window period, and investor attention are used. Ideally, CAR is mainly used because it is observable and it is a portion of acquirer stock return from the takeover announcement, not from the ordinary market movement. However, CAR cannot be used as a primary source in measuring the stock return, as it is often inaccurate and fluctuates over
Asea of Sweden and BBC of Switzerland announced the merger in 1987 to form ABB company. Each parent company is to hold 50 percent of the new company.
1. How was Lincoln able to grow and prosper for so long in such a difficult commodity industry that forced out other giants such as General Electric, Westinghouse and BOC? What is the source of Lincoln’s outstanding and enduring success?
The Political, Social, and Legal Environment of Business. Case Study Analysis: Union Carbide Corporation and Bhopal. A single slip in action may cause lasting sorrow. A slight mistake in operation at a Union Carbide pesticide plant in Bhopal, India, caused a lot of deaths and injuries. What a tragedy it is.
When it comes to safety most people think they are safe, and they have a true understanding on how to work safe. Human nature prevents us from harming ourselves. Our instincts help protect us from harm. Yet everyday there are injuries and deaths across the world due to being unsafe. What causes people to work unsafe is one of the main challenges that face all Safety Managers across the world.
Based on the given information in the case study regarding the acquisition of Nicholson File Company by Cooper Industries, there is no question that Cooper should try to gain control of Nicholson. This decision is based on an analysis of the bargaining positions of each group of Nicholson stockholders which have disparate goals and needs that need to be met. In addition, an appropriate payment method and specific dollar value based on a competitor’s offer and Cooper financial data was decided. The remainder of this paper will provide the analysis and rationale for this determination.
Introduction: Leighton Holdings is Australia’s one of the most reputed organization, which is active in engineering and infrastructure, mining and resources, environmental services industries and telecommunications which is listed on the Australian Securities Exchange since 1962. This company has operations in different countries including Australia, South East Asia, New Zealand, Vietnam, China and Middle East. The main focus and activities of Leighton Holdings include market positioning, strategic direction and planning, financial management and corporate and public affairs.
Risk Management practices by Royal Dutch Shell plc Risk factors considered by Royal Dutch Shell plc Prices of oil, natural gas, oil products and chemicals are affected by supply and demand. Factors that influence these include operational issues, natural disasters, weather, political instability, or conflicts, economic conditions or actions by major oil-exporting countries. Price fluctuations can test our business assumptions, and can affect Shell’s investment decisions, operational performance and financial position. CURRENCY FLUCTUATIONS AND EXCHANGE CONTROLS As a global company, changes in currency values and exchange controls could affect our operational performance and financial position. ECONOMIC AND FINANCIAL MARKET CONDITIONS Shell companies are subject to differing economic and financial market conditions throughout the world. Political or economic instability affect such markets. If such a risk materialises it could affect our operational performance and financial position. TRADING AND TREASURY In the course of normal business activities, shell is subject to trading and treasury risks. These include among others exposure to movements in commodity prices, interest rates, and foreign exchange rates, counter party default and various operational risks Different risk faced by Royal Dutch shell Market risk Market risk is the possibility that changes in interest rates, currency exchange rates or the prices of natural gas, electrical power, crude oil, refined products, chemical feedstocks and environmental products will adversely affect the value of Shell’s assets, liabilities or expected future cash flows. Most of Shell’s debt is raised from central borrowing programmes. Shell has entered into interest rate swaps and currency swaps to effectively convert most centrally-issued debt to floating rate US dollar LIBOR (London Inter-Bank Offer Rate), reflecting its policy to have debt mainly denominated in US dollars and to have largely floating interest rate exposure profile. Consequently Shell is exposed predominantly to US dollar LIBOR interest rate movements. The financing of most subsidiaries is also structured on a floating-rate basis and, except in special cases; further interest rate risk management is discouraged. Based on the Consolidated Balance Sheet at December 31, 2007, the impact on net interest income/expense of a change in interest rates of 1% would not be significant. Foreign exchange risk The functional currency for most upstream companies and for other companies with significant international business is the US dollar, but other companies usually have their local currency as their functional currency. Foreign exchange risk arises when certain transactions are denominated in a currency that is not the entity’s functional currency.
Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.
The history of the Carnival Corporation begins in 1972, when Ted Arison set up Carnival Cruise Lines as a subsidiary of the American International Travel Service. The first ship ran aground, but Arison remained steadfast in achieving his vision of a cruise line offering affordable vacation packages to middle-income consumers. By 1977, Carnival had three ships, and ten years later, as the industry leader, the company went public. In the early 1990s, Carnival began to diversify into land-based entertainment, thus changing its name to Carnival Corp. The company is the world's #1 cruise operator with about a third of the market.
Human Resource Areas of the Shell Group Companies Abstract: This Assignment examines one of the human resource areas i.e., recruitment and selection practices of the Shell Group of companies. We examine how Shell is implementing its concept of fairness and equity as a fundamental value in the management of its human resources. By explain the criteria used for recruiting and selecting process at Shell, we answer the question. What Shell looks for in candidates?