Loewen Group Case Solution
Background
The Acquisition of Perez Company Group (An Argentinean Company) by the Petrobras (Brazilian Oil and Gas Company, Pioneer in the industry) is the major event that has the ability to produce a shift in the economy and industry. The Petrobras is interested in the acquisition of the Perez Company Group (Pecom) as the acquisition will increase the Oil and Gas Production and Reserves. However, the Company has recognized a number of risks and returns from the acquisition of the Pecom that will be fully discussed in the further quantitative and strategic analysis.
Introduction
The Oil and Gas industry are facing a continuous downfall in the prices that reflects the decline in the sales and income of the industry. The Petrobras is the Brazilian oil and gas company. The company was created in 1953 representing the Brazilian Natural wealth. The Company was incorporated with an attractive and dominating slogan that is "the oil is ours".
The Company was established with the incorporation of the Brazilian Government. The government grants the company to have the monopoly. The company has been granted the monopoly in all the crude oil and gas related refining, production, and distribution in the whole country. The official monopoly of the Petrobras was ended in the 1st month of 2002 due to the Government deregulation of prices for all the oil related products.
The Company basically focused on the discovery of the oil resources. The company has started their first onshore discoveries in the northeast of the Brazil. The discoveries have been started in the years of 1950s and 1960s. The giant Deepwater pools were discovered in the middle of 1980.
The Deep water pools were discovered in the Campos Basin with the addition of development of these pools. The discovery of the giant Deep water pools created a boost in the company. The company has gained an upstream shift in the fields of exploration, production, and development of the oil resources and reserves.
The year 2001 was the memorable year for the Petrobras as the company has achieved complete series of the oil and gas product. The company Petrobras became the largest company in the Brazil. However, the rank of the Petrobras was 3rd in the Latin America. In addition, the company was 7th largest oil and Gas Company in the world that is publicly traded. The Company comes to the 185th number when it comes to comparison with the other global corporations around the world according to the consolidated revenues of 2001.
At the other hand, the Perez Companc group was originated in the year 1946. The company was initially listed as a shipping company. The company diversified its operations in the oil business in the year 1960. With the span of time, the company has developed a number expertise and skills in the relative oil business. The company has achieved its first most important oil business in the year 1990.
The company expanded its operations in Venezuela in 1994. And the company keeps on exploring different markets after its first exploration. The company later expanded its operations into the markets of Brazil, Peru, Bolivia and Ecuador. The company restructured and merged as an energy company with the vertical integration structure in 1998.
The company had its initial public offerings in January 2000 and listed on the Buenos Aires Stock Exchange. The company has also launched its American Depositary Receipt certificates through the ADR program in the New York Stock Exchange (NYSE). The major source of the revenues for the Perez Companc Group was generated from its production and exploration operations..................
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