Tutorial Week 10 Mergers and Acquisitions Strategic Alliances Acquisition – involves one firm taking over the ownership (‘equity’) of another, hence the alternative term ‘takeover’ Merger – is the combination of two previously separate organisations, typically as more or less equal partners ‘Financial mergers and corporate takeovers are an everyday thing in the corporate world. However there are some that grab a lot of attention. The attention may come from the sheer volume of money involved or a strategic merger between two independent industries to create one. Companies have ambitious expansion plans as more and more industries come together on a similar platform. In some cases however a merger or takeover can simply be bailout for the previous owner in case the company suffers a lot of loss or is even about to go bankrupt.’ Source: http://topyaps.com/top-10-financial-mergers/ Some examples: Disney Pixar The Disney-Pixar merger was one of the most anticipated mergers in recent times. The merger of the two sets of the most loved animated characters in the world happened in 2006 when Disney put up a bid to buy out Pixar. The two companies have worked together often and this was not so much of an unanticipated move. The two companies have merged well to bring out more success to their already populated list of successful animated films. (source: mag.amazing-kids.org) Adidas - Reebok The second largest and the third largest sports good companies finally decided to come together as one to try and oust the leader in the market, i.e. Nike. However the two companies put together still fall behind Nike. The three companies have long been involved in a battle which is won mostly by Nike as their expansive business plans have helped them take over world markets consistently as the number one manufacturer of sports goods. The merger benefited both the companies and brought two of the most well known names in sports goods together. (img source: dw.de) (Source: Reuters) Ebay - Paypal Although not a very big merger in terms of the money involved, this merger however was a benchmark in the history of the internet. PayPal was acquired at $1.5Billion and the takeover has benefited both the companies greatly. PayPal is among the best known online payment system and eBay is the most well known auction site on the internet. A merger made in heaven for sure, the companies got together in 2002 and have since then reaped benefits from their mutual services. (img source: minetopics.blogspot.in) A sporting merger….. The AFL–NFL merger of 1970 was the merger of the two major professional America football leagues in the United States at the time: the National Football League (NFL) and the American Football League (AFL). The merger paved the way for the combined league, which retained the "National Football League" name and logo, to become one of the most popular sports leagues in the United States. Successful Strategic Alliances Starbucks and Barnes & Noble The coffee house and the bookstore.The two seem like a natural match. The patrons of both of these types of establishments have a historic relationship and an entire culture that has formed around designer caffeinated drinks and a laid-back bookworm disposition. Starbucks’ partnership with Barnes & Noble, starting in 1993, has made the sight so common that university libraries will often open their own internal coffee shops. Indeed, relationships have been the key to Starbucks’ meteoric rise as the global king of coffee retail – their growth has been less about aggressive advertising and more about alliances, echoing the kind of word-of-mouth growth that helps local companies expand. Successful Strategic Alliances Disney and Hewlett-Packard This partnership goes all the way back to the beginning of Hewlett-Packard (HP) itself, and back to the heyday of Walt Disney himself. Formed in a garage by the eponymous cofounders, the company’s first successful product was an audio oscillator purchased by Disney to certify the ‘Fantasound’ system installed in theatres for its 1940 film Fantasia. Flash forward to the digital age. We find HP supplying a good amount of Disney’s IT infrastructure, becoming a core partner to its efforts at “imagineering.” HP helped to develop the Disney World ride Mission: Space.
