In early MayW. Serious discussions for combining the two companies had started in March of that year, following casual conversations that dated back to late
Flinder However, before Maythe U. With this expensive program still under development, Bill Flinder realized the importance of merging with another company that was financially stable. Other factors contributed the negotiation. In addition to nearing retirement, Flinder also believe a merger with RSE would help the transition years for his employees.
Tom Eliot had recently proposed to the board of RSE to focus on diversification. FVC would help diversify RSE; they had the reputation of opening up opportunities for companies looking to diversify, plant capacity, management efficiency, financial resources, or to even counter the effect of a cyclical business.
Also, FVC is in a position that would require financial stability. FVC is a small company and could be pushed out of the manufacturing market if their competition learns of their production process. It needs production know-how if it wants to remain as a strong competitor.
RSE has those strengths. They are a low-cost producer with an unusual production knowledge, which would prevent competitors from learning their process through analysis and reverse engineering.
Through this merger, FVC could reduce their materials and in-process costs while gaining more access to the marketing and distribution network. If Bill Flinder is to merge with another company, why not merge with one that is run by a respected man who actually plans on preserving FVC and its employees?
Despite a decline in the industry, both companies were performing well. Once the acquisition is announced and negotiation is under way, stock price for both companies is also expected to increase. RSE, a big and tough competitor in the industry, is going to be bigger, stronger, and gaining additional market shares.
They prove their stability and growth with this acquisition.Case 50 FVC 1. Tracy Kelly Advanced Corporate Finance February 26, Case # Flinder Valves and Controls, Inc.
Flinder Valves and Controls, Inc. Flinder Valves and Controls, Inc. known as FVC is a manufacturer of specialty valves and heat exchanges.
W.B. Bill Flinder, the president of Flinder Valves and Controls Inc. (FVC), and Tom Eliot, the Chairman and CEO of RSE supranational are currently in the midst of negotiating a nuclear fusion of FVC and RSE.
description and goals set in may , this case reflects the separate perspectives of chief executive officers tom eliot and bill flinder as they approach the negotiations of rse international corporation to acquire flinder valves and controls inc.
appendix 1 flinder valves and controls inc.
Confidential Supplementary Information for Management of Flinder Valves and Controls As Bill Flinder neared retirement, the idea of selling FVC to a bigger firm seemed almost necessary%(21). Flinder would receive a generous option-based incentive bonus that could result in a salary increase of between $ UVA-F Flinder Valves was to become a subsidiary of RSE International—the deal would be structured in such a way as to preserve FVC’s identity.
Flinder Valves and Controls Inc Case Solution, Located in May , this case reflects different views of CEOs Tom Eliot and Bill Flinder approaching negotiations to acquire CSR International Corporatio.