Dupont - You Decide

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Date Submitted: 11/18/2012 07:40 PM

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You Decide Mergers & Acquisitions

DuPont, a company that began as a manufacturer of gunpowder, was founded in 1802 in Delaware. DuPont acquired Conoco in 1981 and was referred to the largest merger in history. After overcoming antitrust issues during the negotiations, DuPont purchased Conoco for 7.8 million. The headquarters was moved from Stamford to Delaware.

It is reported that DuPont went against it’s pricing and supply tactics – however, since oil prices were less volatile than had been previously guessed, DuPont purchased Conoco anyway.

One major issue was bringing Bronfman into a shareholder position of DuPont-Conoco. When the merger was over, Bronfman had 20% of DuPont. DuPont and Seagram agreed that Bronfman could not purchase more than 25% of DuPont stock until 1991. By 1995, Seagrams held four seats of DuPonts board of directors.

The board of directors wanted to sell Conoco off years before it sold in 1999, however decided to stick with it one more year. The very next year, Conoco was more profitable than ever before, making up for the debt that DuPont took on when purchasing them in the first place.

In Over of 1998, the equity carve-out of Conoco by DuPont was a mere 30% of Conoco’s shares. The remaining 70% was divested in August of 1999 – those shares would be offered as a spin off, where by DuPont shareholders could chose to maintain the DuPont shares, or exchange their current shares in for the parent shares in the subsidiary.

In 1999, DuPont sold all of its shares of Conoco, which eventually merged with Phillips Petroleum Company.