2008
DOI: 10.1021/ie071447k
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Synergy in Mergers of Petrochemical Companies within a Complex Considering Purchasing and Selling Advantage with Process Integration

Abstract: Mergers and Acquisitions, M&A, have been active in the petrochemical industry. However, the synergy created by the merger of petrochemical companies has rarely been studied, although it is the primary goal of a merger. This study deals with the merger of petrochemical companies located within one complex. Synergy considerations resulting from process network and boiler integration with fixed cost reduction and market power increase in upstream market (i.e., resource purchasing advantage) and downstream market … Show more

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Cited by 8 publications
(9 citation statements)
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“…In the area of strategic planning, the explicit consideration of the various issues regarding the merger and acquisition problem and the potential synergy which can be achieved should be addressed. Yoon and co-workers considered the merger and acquisition problem for petrochemical companies operating within the same complex under deterministic system conditions; however, the explicit consideration of parameter uncertainty, as well as the extension to other industries would be a worthwhile pursuit. Due to the considered time horizon, operational planning models are often formulated as aggregated scheduling models where the production capacity of the plant is approximated; however, this modeling approach leads to the planning model potentially overestimating the production capacity of the plant.…”
Section: Future Challenges and Opportunitiesmentioning
confidence: 99%
“…In the area of strategic planning, the explicit consideration of the various issues regarding the merger and acquisition problem and the potential synergy which can be achieved should be addressed. Yoon and co-workers considered the merger and acquisition problem for petrochemical companies operating within the same complex under deterministic system conditions; however, the explicit consideration of parameter uncertainty, as well as the extension to other industries would be a worthwhile pursuit. Due to the considered time horizon, operational planning models are often formulated as aggregated scheduling models where the production capacity of the plant is approximated; however, this modeling approach leads to the planning model potentially overestimating the production capacity of the plant.…”
Section: Future Challenges and Opportunitiesmentioning
confidence: 99%
“…The debate has focused on how much M&As will impact the petrochemical industry and the national economy. To assist stakeholders, in an earlier study, the present authors proposed an optimization model to quantify synergy in the merger of petrochemical companies in an industrial complex, considering purchasing and selling advantages . The results of the previous research indicate that strengthening market power can significantly increase profit.…”
Section: Introductionmentioning
confidence: 98%
“…The work of Yoon et al 1 dealt with M&A synergy quantification. This previous work is aimed at horizontal M&A in which the acquirer and target companies are determined.…”
Section: Introductionmentioning
confidence: 99%