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Essay / Research Paper Abstract
This 8 page paper examines the acquisition of Clipper Windpower by United Technologies, examining how and why the acquisition took place in looking at some of the motivations which may have supported the decision before looking at how and why the acquisition failed to produce value. The paper starts with an introduction identify key areas study and presents three research questions, and then provide a literature review and discussion. The bibliography cites 16 sources.
Page Count:
8 pages (~225 words per page)
File: TS65_TEclipperaq.doc
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Unformatted sample text from the term paper:
References 9 1. Introduction The practice of merger and acquisition has become well established, with many businesses choosing to expand using this strategy. One recent transaction was the effective acquisition
of Clipper Windpower by United Technologies, this saw the smaller California based wind turbine manufacturer acquired by the Connecticut based multinational conglomerate. The transaction would only be undertaken by United
Technologies if they believed there would be some value to the transaction, especially as the acquisition was made at a premium, and as this was not a hostile takeover Clipper
Windpower must also have perceived some benefits. The question is why may both firms have chosen this path rather than alternate strategies? 1.1 Study Background It was announced on the
9th of December 2009 that United Technologies would be acquiring a 49.5% stake in Clipper Windpower, in a deal worth ?126.5 million, purchasing 21.8 million shares from existing shareholders as
well as 84.3 million new shares (Macalister, 2009). The acquiring company believed that the acquisition would help strengthen existing operations, as the firm had a number of interests within the
energy sector, as well as provide benefits on the balance sheet (United Technologies, 2010). The commitment to deal continued into 2010, when United Technologies which an agreement with Clipper wind
power to purchase the remaining share of the company brining the total cost of the investment to ?245 million, roughly $385 million (United Technologies, 2010). However, although many in the
markets may believed that the acquisition was a good fit, subsequent events appear to indicate the acquisition decision was flawed; in March 2012 it was announced by United technologies that
they were looking to sell Clipper Windpower, stating that the acquisition was a mistake (Nellis, 2012). With this in mind one may wonder why the acquisition was made in the
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