BUS 508 Assignment 2 Mergers and Acquisitions

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BUS 508 Assignment 2 Mergers and Acquisitions

BUS 508 Contemporary Business

Strayer University

Use the Internet to research a publicly traded company in the United States that has undergone a merger or acquisition

within the last three (3) years. Take note of the circumstances surrounding the merger or acquisition.

Write a four to six (4-6) page paper in which you:

Examine the circumstances that resulted in the merger or acquisition for the selected company. Speculate on two (2)

reasons why the resulting decision to merge or to acquire / be acquired was made. Assess the significant positive (or

negative) effects of the merger or acquisition. Provide at least two (2) examples of those effects now that the merger or

acquisition has been completed. Examine the organizational structure that has resulted from the merger or acquisition.

Analyze the major differences between the resulting company and the original two (2) organizations. Determine whether

or not the human resources management practices of the company were modified to reflect the outcome of the merger

or acquisition. If no changes were necessary, speculate on the reasons why they were not. Provide a rationale for your

response. Use at least four (4) academic quality resources in this assignment. Note: Wikipedia does not qualify as an

academic resource.

Question1. Examine the circumstances that resulted in the merger or

acquisition for the selected company. Speculate on two reasons why the

resulting decision to merge or to acquire/ be acquired was made.

The bigger is often better in the world of corporate, which may

encourage merger and acquisition in general. In fact the result is not

always good, some of newly created companies go bankrupt and in

some cases, mergers companies disband in a sort of corporate divorce.

There are no guaranties in corporate mergers, it is inherently risky and

without proper strategy, intuition, and knowledge mergers can easily fail.

For instance I will examine the merger of Sears and Kmart and evaluate

the merger circumstances and the result of the merger.

The merger of the two corporates came as a result of the failing of the

legend store Sears in the end of the twentieth century. Sears found itself

slowly failing as its competitor’s success of low-end big stores likes

Target and Walmart, and high- end department stores like

Saks Fifth Avenue.

On the other hand Kmart itself was struggling and field chapter 11

bankruptcy protection in 2002 that was leading to closing of 600 stores

and termination of 57,000 employees and cancelation of company’s

stocks. The merger for the Kmart was a remarkable comeback deal.

In 2005 Edward Lampert who’s Greenwich, Conn. based investment firm

controls Kmart and Sears largest individual shareholder with a 15. 8

percent stake, purchased both failing corporates Sears and Kmart, and

merged them to become Sears Holdings Corp. The two nation’s oldest

retailers set eleven billion dollars merger to help both companies, Kmart

has to survive in Walmart world and Sears needs to learn to survive in

the world of Home Depot and Lowe’s (Bhatnagar, 2004).

The goal was a quick kick-start to sales away from Sears’s traditional

based shopping malls. Lampert and Sears chairman and CEO Alan Lacy

promised up to $ 500 million a year in savings within three years from

stores conversions. The new company operates both stores that include

around 3,500 stores combined and Kmart will be converted to Sears. Mr.

Lampert mentioned that he wanted to combine the best of both by

putting brands like Kenmore and building Sears’ presence outside of

malls (Bhatnagar, 2004).

Question2. Assess the significant positive or negative effects of the

merger or acquisition. Provide at least two examples of those effects

now that the merger or acquisition has been completed.

The acquisition did not stop the downward of the two companies and

Sears Holdings continued failing. In 2007 Lampert was named the

American’s worst CEO, and Sears Holdings remains a failure especially

in the light of the recent economic downturn. Many reasons may cause

such failure; some blame their focus on soft goods rather than hard

goods. Others think that the two stores have different cultures that did

not fit the merger. Others think Sears Holdings did not differentiate itself

from its competitors in order to compete.

Five years after the merger Sears Holdings revenue dropped more that

ten percent from 2005 through 2009, the most full fiscal year. Comparing

with its competitors at the same period, their sales rose significantly. For

instance Walmart’s sale rose round 31 percent, Macy’s around 5 percent

and Target’s extra than 24 percent.

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BUS 508 Assignment 2 Mergers and Acquisitions BUS 508 Contemporary Business Strayer University Use the Internet to research a publicly traded company in the United States that has undergone a merger or acquisition within the last three (3) years. Take note of the circumstances surrounding the merger or acquisition. Write a four to six (4-6) page paper in which you: Examine the circumstances that resulted in the merger or acquisition for the selected company. Speculate on two (2) reasons why the resulting decision to merge or to acquire / be acquired was made. Assess the significant positive (or negative) effects of the merger or acquisition. Provide at least two (2) examples of those effects now that the merger or acquisition has been completed. Examine the organizational structure that has resulted from the merger or acquisition. Analyze the major differences between the resulting company and the original two (2) organizations. Determine whether or not the human resources management practices of the company were modified to reflect the outcome of the merger or acquisition. If no changes were necessary, speculate on the reasons why they were not. Provide a rationale for your response. Use at least four (4) academic quality resources in this assignment. Note: Wikipedia does not qualify as an academic resource. Question1. Examine the circumstances that resulted in the merger or acquisition for the selected company. Speculate on two reasons why the resulting decision to merg ...
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