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Introduction Cooper industry HK Porter Company and VLN Corporation are entangled in a battle over the takeover of Nicholson File Company Both HK Porter Company and VLN Corporation have already made their offers to the Nicholson File Company shareholders and now the management of Cooper Industry have to decide whether to jump into the foray for the control of Nicholson File Company or not The major issues faced by the management of Cooper Industry are as following 1Is Nicholson File Company an attractive acquisition target for Cooper Industries Specifically what synergies can be created by merging these firms and in what other aspects is Nicholson an attractive target In what respect if any is Nicholson not an attractive target Overall is there sufficient strategic fit to justify pursuing this acquisition 2What sort of integration issues is Cooper Industry likely to face if it is successful in acquiring Nicholson What should Coopers management do to facilitate successful integration 3What should be the range of prices Cooper Industries should be willing to pay for each share of Nicholsons stock in case it wants to acquire the firm Strategic Analysis - how does Nicholson fit into Coopers acquisition strategy 65533 Cooper could become a major factor in the hand tools business given its expertise in manufacture of machine tools Moreover one of the main problems that Cooper faces currently is a large cyclicality in its business characteristic of the heavy machine tool industry but more pronounced because of its dependence on Oil and Gas industries These industries are heavily correlated with the state of the economy So when there is a slowdown Cooper would be one of the first companies to go down - something that they would want to avoid through diversification by way of acquisitions The hand tools business is a lot less cyclical and cash flows are likely to be less lumpy This fits in with Coopers requirement of smoothing its income flows 65533 The
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