Exploring Strategic Change A Case Analysis of the ConocoPhillips Merger

Abstract

This is an illustrative case analyzing shareholder and accounting outcomes and legal issues resulting from a merger of two major publicly traded companies. In today's business world, the “urge to merge” is tempered by heightened shareholder activism. In response to this activism, boards must proceed with care when negotiating mergers. Challenges to mergers that appear to be in the shareholders' best interest occur often. As is the case here, shareholders and their well funded legal representatives, seek damages for alleged bad decisions. Conoco Oil and Phillips Petroleum announced their intention to merge in November 2001. At that time the cost of gasoline spiraled ever upward and large oil firms put heavy competitive pressure on smaller oil producer/refiners. The merger described as a “merger of equals”, intimated that neither Conoco nor Phillips shareholders would receive a financial advantage (or disadvantage) over other merging shareholders following the completion of the merger. Immediately following the announcement, Michael Iorio, a Conoco shareholder, filed a lawsuit, claiming damages to Conoco shareholders from the merger of the two firms.

Citation

Ockree, K.A., Martin, J. and Moellenberndt, R.A. (2007), "Exploring Strategic Change A Case Analysis of the ConocoPhillips Merger", , Vol. 3 No. 2, pp. 3-24. https://doi.org/10.1108/TCJ-03-2007-B002