Word: merger
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Dates: during 1980-1989
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...fierce competition for Conoco is only the latest manifestation of the merger mania that is sweeping the U.S. This year alone, seven deals each worth $2 billion or more have been started or completed. Like baseball club owners plucking off free agents, corporate captains are choosing up sides in a wild scramble that could bring significant shifts in the balance of power throughout U.S. industry. The Reagan Administration seems to be encouraging the merger makers, and Attorney General William French Smith proclaims, "Bigness does not necessarily mean badness...
...could be rationally integrated into a liquor company. They also feared that Seagram would bring in new management. Around the oil firm's headquarters, employees bitterly joked that the motto of a combined Seagram-Conoco enterprise would be "Drink and Drive." Chairman Bailey quickly searched for an alternative merger partner, or so-called white knight, to thwart Seagram's plans. His first choice was Tulsa-based Cities Service, an oil company less than half Conoco's size but with exploration rights to 10 million U.S. acres. Readily agreeing to talk, Cities Service President Charles Waidelich met with...
...Bailey was bargaining with Cities Service, he and eight other top Conoco officers deftly moved to protect at least themselves in the merger game. Conoco's board of directors gave them new employment agreements that guaranteed the payment of their salaries at least through mid-1984. Bailey's own arrangement called for annual pay of $637,716 until 1989. Observed one cynical Conoco employee: "They equipped themselves with golden parachutes." The company also lined up $3 billion in stand-by bank credit. Conoco executives intended to buy back a large chunk of company stock from the shareholders...
...June 24, the day before the Conoco-Cities Service merger was to be announced, the phone rang in Bailey's office. The caller: Du Font's Jefferson. His question: "Is there any constructive role we can play?" Bailey thanked Jefferson for his concern about the Seagram bid, but replied that he was already negotiating with another company...
Within 24 hours Bailey was on the phone to Jefferson. "Now you can help," said Bailey. The merger talks moved swiftly, in part because Bailey, 57, the burly son of an Indiana coal miner, and Jefferson, 59, a London-born intellectual with a Ph.D. in chemistry, knew each other well. They had worked together on joint gas-exploration ventures that Du Pont and Conoco had begun three years ago in Texas. Jefferson flew to Stamford four times in the next eight days. All along, he assured Bailey that Conoco's management would not be changed...