Essay About Cooper Industries

Essay About Cooper Industries

OVERVIEW:

        Cooper Industries is a broadly diversified manufacturer of electrical
and general industrial products, and energy related machinery and equipment.
The company operates in three different business segments with 21 separate
profit centers.   These segments include electrical and electronic, commercial
and industrial, compression, drilling and energy equipment.   The product line is
consisted of cheap fuses to $3 million compressor tribune sets along with
products such as hand tools and light fixtures.

        The company bid a $21-a-share tender offer to acquire Champion Spark
Plug, manufacturer of auto spark plugs, as a counter offer for the Dana Corp."s
$17.50-a-share bid.   Also, in the mean time, Cooper Industries was considering a
$700 million bid for Cameron Iron Works.   Even though purchasing either or both
companies will give operational and organizational advantages, there were high
financial risks involved. Undertaking both acquisitions would result in a 55% to
60% debt to capitalization ratio.

ANALYSIS:

Cooper Industries acquired more than 60 manufacturing companies over a
thirty year span in order to increase the size and the scope of the company.
Most of the acquired companies made it possible for Cooper to be independent of
the outside environment and giving full control of the manufacturing process
concerning their business while avoiding anti-trust allegations.   Cooper
basically purchased every company that is vital to its energy industry and all
the side industries that effect it.   From tools to fuses to cables to the
drilling equipment was manufactured and distributed by the corporation"s
divisions.   Each acquisition is decided from a wish list that was closely
examined and studied.   At the time of the take over, the Management Development
& Planning division would implement the corporate strategy in a period of three
to five years.   This involves diversification and elimination of the products
that...