Article - http://toronto.ctv.ca/servlet/an/local/CTVNews/20090323/Suncor_merge_090323/20090323/?hub=TorontoNewHome
Summary
This article summarizes the merger between Suncor Energy Inc. and Petro-Canada. With this merger, the largest energy corporation in Canada and fifth largest in North America is subsequently formed. Stockholders in both companies will then retain a certain amount of stocks in the newly-created company, 60 percent for the Suncor shareholders and 40 percent for the Petro-Canada shareholders. The merger is said to been “more than just a strategic fit and that the two companies shared ‘common ground’ with their corporate visions.” It is expected from the companies that they will save approximately $1 billion through “elimination of redundant spending and targeting capital budgets to high-return, near term projects.”
Connections
There are several ties this article has with chapter 10 in the textbook. The merger between Suncor Energy Inc. and Petro-Canada can be seen as a partnership. However, these companies are in fact corporations, each having their own shareholders and workers. Because of the two companies combined together, expenses could be cut and therefore more profits could be earned. The combined assets of both companies help them against our current economic conditions.
Reflection
Mergers are very big changes for both the companies and those that work for them. I have some experience as to how they affect the workers, as my sister is in a company that had been in a merger not so long ago. The transition puts a lot of strain for both sides, especially the lesser dominant company. Workload becomes heavier with information having to be transferred from company to company. Given that certain personnel are no longer needed, layoffs would occur, affecting many individuals via job losses. Mergers provide a new environment for both company heads and workers, and are ultimately done to achieve goals such as lower spending and higher profits.
