Description
Merger, Acquisition, and International Strategies
Choose two (2) public corporations in an industry with which you are familiar – one (1) that has acquired another company and operates internationally and one (1) that does not have a history of mergers and acquisitions and operates solely within the U.S. Research each company on its own Website, the public filings on the Securities and Exchange Commission EDGAR database (http://www.sec.gov/edgar.shtml), in the University's online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.
Write a six to eight (6-8) page paper in which you:
- For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.
- For the corporation that has not been involved in any mergers or acquisitions, identify one (1) company that would be a profitable candidate for the corporation to acquire or merge with and explain why this company would be a profitable target.
- For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement.
- For the corporation that does not operate internationally, propose one business-level strategy and one corporate-level strategy that you would suggest the corporation consider. Justify your proposals.
- Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
Explanation & Answer
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Running head: MERGERS AND ACQUISITION
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Mergers and Acquisition
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MERGERS AND ACQUISITION
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Mergers and acquisition
Introduction
This refers to the combination of two business entities where one corporation is absorbed
by another huge corporation. The company that is considered to be less important losses it’s
identity and becomes a subset of the huge corporation. The new rights, privileges and other
business advantages are then fully associated with the new corporation; after absorbing the less
influential one. Mergers are associated with better management skills and other social and
financial benefits such as reduced costs, improved quality and possibility of enhanced output
within the organization. Generally, there are three types of mergers i.e. vertical merger in which
the company acquires a supplier or a customer. The horizontal merger happens when one
corporation or business entity acquires another entity which happens to be discharging same
products within the same locality of the business. This is very important in trying to curb
unhealthy competition that emanates. Conglomerate merger is when there is complete acquisition
of business products among the parties that don’t have any form of relationship. This article is
addressing two international corporations; Vodafone Airtouch PLC (result of merging) and
American Public Education Inc. (operating only in America).
Acquisition of Mannesmann by Vodafone Airtouch PLC
This was the highest ever form of corporate acquisition in the year 1999. Being a giant
British mobile phone group, Vodafone wanted to fully gain competitive advantage in the world
of communication and technology. This historic take over raised a lot of debates among the
German capitalists, who wanted to defend their culture that is determined by huge employee
involvement in the core functions of the organization. In response to this, Vodafone accepted to
MERGERS AND ACQUISITION
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include German form of industrial culture and the process of governance within the corporate
world (Rosemond Boohene et al. 2010).
Strategy behind acquisition Mannesmann by Vodafone Airtouch PLC
The first sole strategy that was used by Vodafone to acquire Mannesmann was exchange
of company shares. Following this inferior offer by Vodafone, Mannesmann chief executive
officer rejected this offer which later saw other important business negotiations among the two
companies. Later on, Vodafone came up suggestion offer of 53.7 ratio sharing agreement for the
process of complete acquisition of Mannesmann. Still this form of acquisition was strongly
rejected until bett...
