Cooper Industries Case Study Essay

OVERVIEWCooper Industries is a broadly diversified maker of electrical and general industrial products, and energy related machinery and equipment. The partnership operates in three different business segments with 21 separate profit centers. These segments accept electrical and electronic, commercial and industrial, compression, drilling and energy equipment. The product line is consisted of bum fuses to $3 one million million million compressor tribune sets along with products such(prenominal) as hand tools and clear fixtures.The company bid a $21-a-sh ar t laster offer to acquire mavin Spark Plug, manufacturer of auto spark plugs, as a buffet 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 twain companies give give operational and organizational advantages, in that respect were racy financial risks involved. Undertaking both acquisitions w ould result in a 55% to 60% debt to capitalization ratio.ANALYSISCooper Industries acquired more than 60 manufacturing companies everyplace a thirty year span in order to ontogenesis 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 appendage concerning their business while avoiding anti-trust altogetheregations. Cooper basically purchased every company that is brisk to its energy industry and all the side industries that effect it. From tools to fuses to cables to the drilling equipment was make and distributed by the corporations divisions.Each acquisition is decided from a wish list that was closely examined and studied. At the time of the take over, the focus 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 are po or sellers. In some cases the production plant is relocated and the round is reorganized for the best economical set up. In time all these companies are turned into profit centers.RECOMMENDATIONSOne of my first suggestions will be to consider Cameron Iron Works first since all the valves and other inborn gas and petroleum products will be more beneficiary. Apparently there is more make for Camerons products than the hero sandwichs. Little adjustments in the production execute along with the Cooperization adjustment will stand make the company efficient in a short period of time. In contrast, Champion is considered to have 1950s production techniques and only one product line, spark plugs, which will require tremendous changes within the company.The other option whitethorn be to purchase both of the companies, regardless of the financial risks involved. By allocating all the departments such as Management Development & Planning in the process, Cooper may turn things around.Sin ce the beginning, Coopers way of acquiring companies seem to gain success stories in the end. Champion still has brand name quotation in Europe and Asia (personal knowledge) which possibly taken advantage of. Major changes for the American market may take place while the revenues from the overseas gross sales finance the process. And once the changes are made in here, according to the demand the product line maybe readjusted for those markets.One other option for the Champion acquisition maybe to consider other possible options in the self-propelling parts industry. There may be other companies requiring less adjustment, and maybe turned into profit centers in less time than Champion.If buying both the companies is not possible at the time, then Cameron seems like a crack option giving independence to Cooper in the valve dependence. Utilization of this company seems more of a priority at the time. However Dana may end up buying Champion if Cooper delay the acquisition.