ch 10 Industrial Organization in Canada

http://toronto.ctv.ca/servlet/an/local/CTVNews/20090323/Suncor_merge_090323/20090323/?hub=TorontoNewHome

Suncor Energy Inc and Petro Canada have merged into one company to be better positioned to compete in the economic uncertainty. Once merged, they will become the largest energy company in Canada. Suncor will have a bigger company percentage with 60% and Petro Canada with 40%. After merging, it has been stated that “it’s more than just a strategic fit and the companies will share common ground with their corporate visions.”Through elimination of redundant spending capital budgets for high returns, each company is expected to save about one million.

The main connection between this article and chapter 10 is partnership. Suncor Energy Inc and Petro Canada were two individual companies which joined together as one. Although, the companies have merged, each company has their own shareholders and workers. Profits are expected to be gained because expenses would be cut off. Both Suncor and Petro Canada are expected to save 1 million.

I think merging companies can lead to benefits. The positive side to this is the company will now have a better chance to compete in the economic recession just like it mentioned in the article. They are the largest energy company in Canada and the 5th largest in North America. I think that after merging, the company will have a better reputation and will have a long term benefit. However on the other hand, it could lead to lay-offs and many other negative down sides. There will be more lay-off workers because due to merging.