Rhone-Poulenc Rorer, Inc
21 Pages Posted: 21 Oct 2008
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Rhone-Poulenc Rorer, Inc
Abstract
This case considers the unusual terms under which Rhone-Poulenc, the large French chemicals producer, acquired the U.S.-based Rorer Group, Inc., in August 1990. Set a year later, in August 1991, the case reviews the terms of the merger and the experience of the new entity in its first year, and invites the student to evaluate the "contingent value right" (CVR) issued by Rhone-Poulenc in the merger.
Excerpt
UVA-F-1015
Version 1.1
RHÔNE-POULENC RORER, INC.
The interest with which industry analysts, the financial community, and our shareholders have responded to RPR has been encouraging. As evidenced in the strong performance of our stock during 1990 and the attendant decline in the CVR since issuance of the security by Rhône-Poulenc S.A. in August, many among our key audiences have moved from curiosity to confidence in RPR's ability to fulfill its ambitious sales and earnings goals for the future.
—Company, 1990 Annual Report
. . . leadership requires, first, critical mass in order to compete effectively in research and marketing; second, a global presence to leverage these investments; and third, advantageous partnerships. . . .
. . .
Keywords: corporate financial strategy acquisitions, bargaining/bidding, forecasting, hedging, joint ventures, option pricing diversity international
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