Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2004
Length: 27 pages
Data source: Published sources
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Abstract
The Brazilian oil company, Petrobras, is evaluating the acquisition of an Argentine oil company, the Perez Companc Group (Pecom). The acquisition would increase Petrobras' oil reserves and expand its interests outside Brazil, a significant step for the largest company in Brazil. Pecom is for sale because it has been severely affected by the financial crisis in Argentina. Students have the opportunity to assess the impact of a severe devaluation on a company. There is also considerable uncertainty about how to value Pecom, and students must weigh the importance of country risk in determining the appropriate discount rate to use in the valuation. Finally, there is also uncertainty about Petrobras's own future as the Brazilian government has controlled it. Students are allowed to review the efficacy of changes in corporate governance implemented by Petrobras, despite its ongoing link to the Brazilian state and the associated political uncertainties of that affiliation. Students will consider different methods of valuation and the impact of politics on cross-border acquisitions. To obtain executable spreadsheets (courseware), please contact our customer service department at custserv@hbsp.harvard.edu.
Industries:
Size:
USD34,145 million revenues
Other setting(s):
2002
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 25 April 2006
Length: 22 pages
Data source: Published sources
Portuguese language
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2004
Revision date: 5-Apr-2019
Length: 27 pages
Data source: Published sources
Spanish language
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2004
Revision date: 5-Apr-2019
Length: 28 pages
Data source: Published sources
About
Abstract
The Brazilian oil company, Petrobras, is evaluating the acquisition of an Argentine oil company, the Perez Companc Group (Pecom). The acquisition would increase Petrobras' oil reserves and expand its interests outside Brazil, a significant step for the largest company in Brazil. Pecom is for sale because it has been severely affected by the financial crisis in Argentina. Students have the opportunity to assess the impact of a severe devaluation on a company. There is also considerable uncertainty about how to value Pecom, and students must weigh the importance of country risk in determining the appropriate discount rate to use in the valuation. Finally, there is also uncertainty about Petrobras's own future as the Brazilian government has controlled it. Students are allowed to review the efficacy of changes in corporate governance implemented by Petrobras, despite its ongoing link to the Brazilian state and the associated political uncertainties of that affiliation. Students will consider different methods of valuation and the impact of politics on cross-border acquisitions. To obtain executable spreadsheets (courseware), please contact our customer service department at custserv@hbsp.harvard.edu.
Settings
Industries:
Size:
USD34,145 million revenues
Other setting(s):
2002
Related
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 25 April 2006
Length: 22 pages
Data source: Published sources
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2004
Revision date: 5-Apr-2019
Length: 27 pages
Data source: Published sources
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2004
Revision date: 5-Apr-2019
Length: 28 pages
Data source: Published sources