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Case: MW Petroleum Corporation (A)Problem StatementThis case relates to the valuation of one of the wholly ownedsubsidiaries of Amoco Corporation, the MW petroleum. This divisionowns a large number of gas and oil reserves and there are a number ofproperties owned by the company, which are basically at differentstages of their engineering, production and development. This is one ofthe large acquisitions for Apache and if the transaction is financedthrough debt, then the company will have to analyze number ofproblems before making a final decision. Questions for MW Petroleum Case A:1.What do you think motivated the sale of MW properties? Are the properties likely to be worth more to Apache than to Amoco?First of all, for any property acquisition shall be based on sufficient motivations to both buyer and seller, which is able to be reflected on value of transaction, the analysis has been performed by valuing all the reserves of the company aggregately but before that the corporatestrategies and goals of the acquirer and acquire have also been analyzed as follows: Corporate Objectives & Strategies of Amoco and ApacheThe corporate objectives and the strategies of both companies arequite different. Amoco Corporation is a company which has alreadyreached a maturity stage since it is the 5th largest oil and gascompany in United States whereas, Apache Company is in the growthstage and it is currently the operator of small and the medium sizedproperties. The objectives of both the companies are also different. Theobjective of Amoco related to enhancing and increasing profitabilitywhereas the objective of Apache is to basically increasethe size of thecompany and grow. Lastly, the strategy of both the companies is alsodifferent where Amoco is currently engaged in divestment to focus onits most attractive areas of the business, whereas, Apache is focusingon reconfiguring and rationalization by acquiring more effect andcontrollable properties. Therefore, looking at these strategic initiativesof both the companies it could be said that MV petroleum is moreimportant for Apache as compared to Amoco. Additionally, some brief