Cooper Industries, a Corporation that Engages in Successful Mergers

Topics: Mergers and acquisitions, Corporate finance, Cooper Industries Pages: 1 (278 words) Published: November 18, 2012
Cooper Industries
In a given year, there will be hundreds of mergers and acquisitions occurring throughout the world. Only the strongest mergers will be sustainable. Coopers Industries’ is a great example of a corporation that continuously engaged in successful mergers and acquisitions. Its strategy is simple and to the point: to diversify and acquire complementary products to its already existing product lines. Cooper aimed to build on its core competencies and diversify for a stronger market hold in the industries it wished to pursue. Cooper had consistent corporate level strategies that led to its success. One strategy was to use complementary acquisitions that added value to existing resources. They strategically purchase companies that held strong assets and had stable earnings to provide a larger market share in the manufacture industry. Another strategy was that Coopers used a 40% debt to equity ratio leaving excess cash for them to use to acquire more companies when needed. Exhibit 9 displays: strong corporate policy, each division had its own manager which was held responsible and was in control for that specific division. Overall, Cooper as a corporation adds value by using their decentralized operating philosophy, “cash is king” motto, and strong brand value in daily operations. For example, exhibit 3 demonstrates they acquired companies with a strong name associated with it in hopes to strengthen the market share. Cooper reviews each acquisition very carefully. After they acquire a company they trim down and only keep products from the new corporation that adds value. Their history has proven they only acquire companies that match up with their resources which lead to capabilities and core competencies. This ultimately provides them with a sustainable
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