allows investors to look at the companies form a different perspective and make better informed decisions. Sounds like a good way to go!
I guess the company split is in vogue now, just think about the recent split of Motorola into MMI and MSI. The excuse from management team wasexact the same - each split part of the original company can focus on its own business.
In fact both investors and regular employee are losers, the winners are the company executives and Wall street firms who handle the split. Split and merger itself never create more value, instead it tends to waste precious capital.
Re: Failure to manage?
tokyogai
7/7/2011 2:44:58 PM
I guess that would make some sense. I wonder why that was not put forward as the reason?
Re: Failure to manage?
driven
7/7/2011 11:30:32 AM
I think you're right. I've been trying to determine Marathon's motivation, and your example seems like it hit the nail on the head.
Re: Failure to manage?
Tenacious
7/7/2011 11:21:08 AM
Don't you think it may have more to do with separating the liability of one arm of the company from another? Say there is a production accident that results in a catastrophe. If the company hadn't split, all the assets are vulnerable, Now the retail arm is "safe." And vice versa.
Re: Failure to manage?
tokyogai
7/7/2011 9:48:45 AM
It is more than just skepticism- it is calling out the lies they tell to get what they want. Ofcourse there are synergies. If you have lost focus in the business- go look in the mirror. I am surprised that the market tends to reward this brand of incompetance.
tokyogai,
I share your skepticism. Why couldn't they create a structure that allowed the same two parts to operate at arms-length under the original management? This would save - at least - the burden of duplicating the public disclosure efforts.
And in the MRO case, the split also seems to leave the new downstream company (MPC) financially weaker. This is a concern since one of the businesses they're in is oil exploration - normally a high-risk high-reward business. In oil drilling, you really want a company that can see their investments all the way through to the payoff.
Failure to manage?
tokyogai
7/6/2011 12:56:47 PM
I can not help help but to think that management was not doing a good job if they see better focus in splitting a company. When companies are combined, you always hear about the synergies and better use of resources by avoiding duplication. When they come back apart it is always focus. If they were well managed there should be no reason to split. The combined company should be more resistant to fluctuations in oil prices and in retail pricing. I just have a hard time believing the company line.
Marathon
AskAsa
7/6/2011 10:51:22 AM
The company is appropriately named because they are in it for the duration and nothing stops them.
In 2007 I was reporting from Findley post-flood. I stood in front of the Marathon building looking at a flood water mark on the wall that showed the water had been as deep as my hip. Even with the basement and first floor washed out, Marathon was back in business within a handful of days. The people of Findley are proud of this major employer and committed corporate citizen.
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