W.B. Bill Flinder, the president of Flinder Valves and Controls Inc. (FVC), and Tom Eliot, the Chairman and CEO of RSE supranational are currently in the midst of negotiating a nuclear fusion of FVC and RSE. Both companies are aware of the benefits, but alike outride apprehensive due to the risks of completing an acquisition in the seek economy. Prior to 2008, the U.S. manufacturing industry had experience a decrease in consumer demand because of tighter borrowing standards and a weak housing field in the past year, according to a recent analyst. However, forward May 2008, the U.S. began to experience go economic conditions, which provided FVC a better environment to introduce its new, hydraulic-controls system called the widening gyre, which can be used in the military industry.
With this expensive program mollify under development, Bill Flinder realized the importance of merging with another(prenominal) company that was pecuniaryly stable. Other factors contributed the negotiation. In addition to nearing retirement, Flinder also believe a merger with RSE would help the transition days for his employees. FVC and RSE should follow-through and complete the negotiation because one companys strengths make up for the others weaknesses. Tom Eliot had deep proposed to the board of RSE to focus on diversification.
FVC would help diversify RSE; they had the disposition of opening up opportunities for companies looking to diversify, plant capacity, management efficiency, financial resources, or to even counter the effect of a rotary business. Also, FVC is in a position that would require financial stability. In addition to the required funds for the widening gyre program, the increment in the consolidation trend posed as authorisation problem for FVC because it would give away the companys combative advantage. FVC is a small company and could be pushed out of the manufacturing market place if their competition learns