Merger, Acquisition, and International Strategies of FutureFuel Corp and Exxomobil Companies

Merger, Acquisition, and International Strategies
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Merger, Acquisition, and International Strategies
Introduction
Merger and Acquisitions is an overall term that refers to companies or assets consolidations. Though diverse transactions are classified under the Merger and Acquisition group, a merger only means two companies combining to form one new company. An acquisition on the other hand is company purchase by another with no new company being formed (Straub, 2010). Boards of directors in a merger approve the arrangement and seek approval of shareholders. The company that has been acquired seizes to exist after the merger; it becomes part of the company that acquired it. In acquisition, the company that is acquiring gains the bigger stake in the acquired company, and never changes its legal structure or name. This paper will feature FutureFuel Corp and Exxomobil companies in the discussion of Merger, Acquisition, and International Strategies
FutureFuel Chemical Company is a company that sale and manufacture specialty bio-based and chemical products mainly in the United States. Future-Fuel operates in two major segments that include Bio-fuels and Chemicals (FutureFuel Chemical Corp., 2015). The segment of chemicals provides manufacturing services of chemical customs for precise customers, like detergent bleach activators and manufacturers of consumer products; a science companies intermediates and proprietary herbicide; agrochemicals; and consumer and industry products, like personal care and cosmetics products, polymer additives, adhesion promoters, ink colorants, polymer and specialty polymers, specialty dyes, imaging and photographic chemicals, as well as food additives. The chemical segment also sells and manufactures performance chemicals that include a family of nylon modifiers and specialty chemicals of small-volume.
The Bio-fuels segment which is part of FutureFuel Corp production sells and produces biodiesel, and petro-diesel that blend with biodiesel. Bio-fuels segment further operates a granary that purchase and sale commodities of agriculture, majorly rice, soybeans, and corn. The segment markets its products through rail and truck directly to the customers. This company solely operates in the US with no acquisition or merger (FutureFuel Chemical Corp., 2015.)
ExxonMobil is an American international company with its headquarters in Irving, Texas. The company was begun in 1999 after merging of Exxon and Mobil companies. The company is among the largest petrochemical companies globally. The chemical company offers a wide range of products that include plastic bottles, packaging materials, automobile bumpers, solvents, synthetic rubber, among other consumer goods (ExxonMobil, 2016). ExxonMobil hold positions of leaderships in highest-growth and largest-volume petrochemical products globally. It is the biggest aromatics manufacturer globally that include benzene and paraxylene. The company further produces olefins, like propylene, ethylene and also polyolefin, with inclusion of polypropylene and polyethylene. These Company products are regularly used in manufacturing of daily products like automotive parts, packaging film, and polyester fiber.
Strategies that led to the merger between Exxon and Mobil: Was the choice wise
Business Mergers can be successful or a failure. A merger can be a failure despite costing lot of money. The Exxon and Mobil Corporation merger is one of the most successful mergers in the world. Both mergers had originally come from standard oils. The merger deal between the two corporations was finished in late 1998. Under the deal terms, the new company was named Exxon Mobil Corp hence retaining both names of the original companies Exxon and Mobil. This is one strategy that these companies used to make the merger a success. Through linkage of the names, both companies felt they owned the new company. ExxonMobil would become one the largest manufactures of oil globally (ExxonMobil, 2016). The two companies were originally giant companies in the world and the merger only made them bigger.
The other strategy that led to the merger was cost reduction strategy through sharing costs of production. The merger was also aimed at offsetting low market price for oil. This merger became a success with ExxonMobil becoming the world’s largest company in sales. The company also increased in production and market value after the merge, with a daily production of over 3 million liquids barrel and over 10 billion natural gas cubic feet. The Exxon Corporation and Mobil Corp. merger was successful since it brought great profits in the US. Through ExxonMobil and other giant oil companies, the U.S. could exceed Saudi Arabia as the top oil producer in the world by 2020. The oil prices in US could also get lower in future due to efficiency its ability to increase more oil in future could be made possible. In general, the ExxonMobil merger was a big success and also crucial in the US goal of being self-sufficient of oil (ExxonMobil, 2016).
A company that would be a profitable candidate for Future-Fuel Chemical Corporation to acquire or merge with and why this company would be a profitable target
Future-Fuel Company should merger with Flotek Industries, Inc. This is a public company that develops Chemical & Logistics, sells and manufacturer’s specialty chemicals that are used in gas and oil well stimulation, blending and cementing. The company also manufacturers Drilling Products ;designs, repairs, manufactures, markets also installs down hole drilling tools used in mining, oilfield, and water industries. In its Artificial Lift division, the company provides components of pumping system that include electric submersible pumps gas separators and production valves.
I chose this company since by being part of Future-Fuel, both companies will save a lot of money that they use in purchasing goods and products used in the manufacturing of chemicals. For instance some of the products used in manufacturing of specialty chemicals are sold by Flotek industries. Besides that, both companies that are in chemical industry will increase their production and become more diverse. Through the merge the companies will not only be producing the chemical products, they will...