Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Strategic Management

Plan for today will be to discuss:

Strategic alliances Mergers and acquisitions Hostile takeovers including implications Company failure (other than a hostile takeover)DemergingDivestmentOffensive mergerDefensive merger

For class discussion : The Granada hostile takeover of Forte

: Iberia -British Airways Merger -(ongoing)

: Kraft hostile takeover of Cadbury

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

What is a strategic alliance?

Astrategic allianceis where two or more

organisations share resources and activities to pursue a strategy.

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Types of alliancesJoint venturesConsortiaNetworksFranchisingLicensingSubcontracting

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

A mergeris a mutually agreed decision for joint ownership between organizations

An acquisitionis where an organisation takes ownership of another organization.

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Merger vs. Acquisitions

A

MergerBCThe consolidation or combination

of one firm with

another

A

AcquisitionBThe purchase of one firm by

another so that

ownership

transfers

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Issues affecting success of acquisitions and mergers Can value be added to acquisition?

Can the commitment of middle managers be gained?

Will expected synergies be realised?Are there problems of cultural fit?

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Mergers and Acquisitions

Need for strategic

interdependence

Need for

organizational

autonomyLowHighPreservation Symbiosis

Holding Absorption

Haspeslagh. P. C. and Jemison D. B. (1991).

Managing acquisitions: creating value Through

Corporate Renew. New York: Macmillan.

HighLow

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Absorption

Haspeslagh. P. C. and Jemison D. B.

(1991). Managing acquisitions: creating

value through corporate renew. New

York: MacmillanNeed for strategicinterdependence LowHighHigh

Need for

organizational

autonomy

LowPreservation Symbiosis Holding Absorption

In absorption acquisitions the objective is ultimately to dissolve

the boundary between both units. The acquiring company

needs the courage of its own convictions to ensure that its

vision for the acquisition is carried out (Haspeslaghand Jemison1991).

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Preservation

Haspeslagh. P. C. and Jemison D. B.

(1991). Managing acquisitions: creating

value through corporate renew. New

York: MacmillanNeed for strategicinterdependence

HighLow

High

Need for

organizational

autonomy

LowPreservation Symbiosis Holding Absorption

In preservation acquisitions there is a high need for autonomy and

a low need for interdependence among combining firms. In such

situations the primary task of management is to keep the source of

acquired benefits intact, because deterioration in the acquired

company’s ways of managing, practices, or even motivation would

endanger success (

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Holding

Haspeslagh. P. C. and Jemison D. B.

(1991). Managing acquisitions: creating

value through corporate renew. New York:

Macmillan.Need for strategicinterdependence HighLow

High

Need for

organizational

autonomy

LowPreservation Symbiosis Holding Absorption

These would be acquisitions where the firm has no intention of integrating

and creating value through anything expect financial transfers, risk-sharing,

or general management capability, even though the two firms are

presumably in such a similar businesses that there is no need for

organizational autonomy. The only integration in such acquisition would, in a

sense, be mere holding activity

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Symbiosis

Haspeslagh. P. C. and Jemison

D. B. (1991). Managing

acquisitions: creating value

through corporate renew. New

York: Macmillan.Need for strategicinterdependence HighLow

High

Need for

organizational

autonomy

LowPreservation Symbiosis Holding Absorption

Symbiotic acquisitions involve high needs for strategic interdependence. Two organizations first coexist and then gradually become increasingly

interdependent. This coexistence and mutual dependency are slowly achieved despite the tension arising from conflicting needs for strategic capability

transfer and the maintenance of each organization’s autonomy and culture. To succeed in truly amalgamating the organizations symbiotically, each firm

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Symbiosis

Symbiosis

e.g. Firms that are organic …. Thus

‘…. Interaction between two different organisms living in close physical association, typically to the advantage of both….’(The New Oxford Dictionary 1998).

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Demerging

Demergingis a large -scale form of corporate change. Where a set of related SBUsare split from the company.

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Divestment

Divestment takes place when a firm decides to divest a part of the firm.

–Management buy out / buy in

Source: Viswanath. P. V. 2008. Mergers and Acquisitions, Pace University New York City , Westchester ,USA

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Company failure

Liquidation is the most serve form of divestment where a firm’s assets are disposed.

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Company failure

Strategic interdependence infers: a dependency on each other.

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Merger : to increase dominance in a market

AOffensive

Merger

Expand out Designed for strategic growth

To increase barriers to entry

Increase market share, penetrate new markets

Increase capabilities

Mergers, Aquisitions, Hostile Takeover, etc - Slides l2

Merger : to enhance prospects of long-term survival

ASynergies -

rationalisation

consolidation DefensiveMerger

To avoid being taken over

Survival of the fittest -eat or be eaten

Defensive Merger: a merger where a company joins with another to avoid beingtaken over(bought and controlled) by a third company.Source: /term.asp?t=defensive-merger

本文来源：https://www.bwwdw.com/article/vu64.html