Mergers and acquisitions (M&As) have been for decades a popular strategy for organizations to grow globally. The goals are to produce economies of scale (Shelton, Hall, & Darling, 2003), increase profitability and market share (Cartwright & Cooper, 1993a), and to achieve synergy (Cartwright & Cooper, 1993b; Shelton et al., 2003). It is an effective way of achieving rapid corporate growth, penetrating into new markets, and gaining a number of other strategic and competitive advantages.
Moreover, cross-border mergers and acquisitions are a large component of global foreign direct investment (FDI) activities according to the United Nations Conference on Trade and Development. Indeed, Global FDI activity was at its peak at US $1.7 trillion during
…show more content…
Fortunately, some organizations successfully complete cross-border mergers and acquisitions thanks to a great management of cultural issues. They understand that cultural fit is often as important as financial and strategic issues in the objective of achieving a successful deal. Furthermore, cultural differences of two companies, if assessed, managed, and integrated well, can be a source of value creation, synergy, innovation, and learning, as exemplified by the successful merger of Renault and Nissan, and the one of Arcelor and Mittal Steel.
In this report, we will present you the ArcelorMittal merger in order to highlight the main features of cross-border mergers from a cultural perspective. It is rooted in academic researches that poor culture-fit or lack of cultural compatibility is a key reason for M&A failure, but it is also recognized that diversity in culture can reversely be a key driver of growth, innovation or synergy. This paradox of cross-cultural mergers and acquisitions convinced us that it is paramount for companies to understand cultural issues underlying their M&A deals.
First, we will present the business opportunities and challenges that Arcelor and Mittal Steel coped with during the merger, and the various stages of the
…show more content…
The management has for example constantly tried to discredit Mittal Steel. Presented as a “company of Indians”, the steel giant was accused of producing cheap steel.
Moreover, CEO Guy Dollé had personal issues with Lakshmi Mittal and presented its offer as “150% hostile”. According to him, Lakshmi Mittal was not sharing European “cultural values” and was suffering from “mono-cultural management”. He has also strongly criticized Mittal Steel’s corporate governance: the fact that Mittal’s family members were taking part of the management was pointed out several times.
India has also played a role during the merger. Despite the fact that Mittal Steel was a European company, some Indians – but not Lakshmi Mittal – thought that the deal was curbed due to the nationality of Mittal Steel’s CEO. Even the Indian government, through its Commerce Minister Kamal Nath, raised this presupposed racist issue in numerous forums. And due to oppositions to the deal, India had even threaten Luxembourg not to ratify a specific taxation accord.
Finally, Mittal Steel has seized the opportunity to acquire Arcelor despite big
He also appeals to Ethos by attacking the ethics of these big brand companies. In this essay, Ravisankar addresses the main argument against his thesis the idea that it would hurt third-world’s economy .He refuses this argument by saying that gives no excuse to give works
Kaveena HBC essay socials 10 November.8.15 In 1821 the Hudson’s Bay Company and North West Company merged under the name of The Hudson’s Bay Company, ending years of rivalry for dominance of the fur trade. This happened because neither one of these 2 companies could grow because all their effort was put in competing with each other to be at the top rather than trying to enhance their own company’s. With this merge came a competent controller, George Simpson. He was very authoritative in everything he said and did with the company.
The combination of the government’s post-Civil War conservative laissez-faire economic policy and its aid to the industry, such as the land grants to the railroad companies and infusion of capital and favorable tax, brought industrial boom and the creation of big corporations at the last third of the 19th century. The big corporations used unfair practices to monopolize the industry and maximize their profits. These practices included “pooling”, the agreement to divide territory and share earnings between companies, favorable “rebates” offered by the railroads to large shippers yet charging small shippers such as farmers, and frequent “kickback” bribes to government officials. As a result there was an increasing disparity between the rich and
The first section of this essay focuses on the possible causes of corporate failures, including dominant CEO, poor strategic decisions and the failure of internal control.
Comcast-NBC Universal on the other hand, is the fusion of three distinct organizations; Comcast Cable (founded in 1963), the National Broadcasting Company (founded in 1939) and Universal Pictures (founded in 1912), who were formed into a singular corporation in April 2013. Much like its rival corporation Disney, Comcast-NBC Universal is divided into similar divisions including television, theme parks and resorts and motion pictures. In contrast to Disney, Comcast-NBC Universal seeks to aim beyond the mainstream family market and creates media which appeals to all demographics. Examples of this include their animation division, Illumination Entertainment producing kid-friendly hits such as Despicable Me, their theme parks which gravitate towards families with older children and NBC’s primetime
After an analysis of both Metro Inc., and Loblaws Companies Limited, we have come to the conclusion that Metro poses the better investment opportunity. Metro, Inc., is one of the leading retailers and distributors of food and pharmaceutical products in Quebec and Ontario. It currently pays a quarterly dividend of $0.1625 per share, equating to $0.65 per share on an annualized basis. Its dividend yield is only 1.26%, but Metro is consistent with its payout as it hasn’t fallen below 1.20% in the past five years. Although it’s yield is lower than Loblaws, Metro has raised its annual dividend payment for 22 consecutive years.
Investment Banking Report “Mergers and Acquisitions” Student Names and Numbers Despo Michaelidou - Ioanna Panayiotou - Mikaella Savva - 20140213 Katerina…. Svetlana…. Introduction Back in 2006, a merger & acquisition agreement between two well-known companies set the basis for the continuation of the evolution in the animation industry. Being partners for more than a decade, Disney and Pixar eventually merged, after a number of unsuccessful attempts.
Many mergers tend to fail and many others succeed. A merger is the combining of assets and operations, usually between two similar sized companies, in an agreement to join together. Mergers can cause bankruptcy, job losses, less choices, and even a breakup. On the other hand, they have many advantages such as, increased market share, lower cost of production, and higher competitiveness. Most mergers can be highly risky but with the presence of knowledge and intuition they can be successful.
An Analysis of Lincoln Electric Company’s Culture through Assessment of its Case Study After thorough investigation of the Lincoln Electric Company’s (LEC) Harvard Case Study, certain understanding and reflections may be made about the company’s culture from a multi-faceted perspectives such as the visual aspects of culture and its maintenance dynamics as observed in the textbook’s Chapter 8. ( Carpenter, Taylor, & Erdogan, 2009) Continuing Influence of Founders at Lincoln Electric It is easily evident from the case study that the diverse aspects of LEC’s operations --- from investors, employees, and customers to how the senior management conducts and approaches its business --- all reflect the philosophy, vision, and ideals of its founders:
Why is such a question relevant to a company like ICI, which is considering a specific acquisition? Explain your answers. Answer: From the stand point of society, synergy is the only benefit to the same. Tax considerations, diversification, control, purchase of assets below replacement cost are not relevant from the standpoint of society.
Zac Andrus MGB 516 Feb. 27, 2018 Case Analysis Silvio Napoli at Schindler India Key Issues Below are a few of the main key issues that Silvio Napoli faced when starting at Schindler India. These issues are looked at in more depth in the following analysis section, showcasing why they may have surfaced and what they mean for Napoli in his current environment. 1. Market entry to India was based on a standardized elevator that didn’t meet customer needs (no customization options, cost-reduction was the top objective, and rapid urbanization in India was leading to higher quality technology expectations). 2.
In this paper, we analyze the factors for acquisitions, business environment during the deal and intercultural aspects in detail. COMPANY BRIEF Tata Motors: TATA Motors is the largest manufacturer of automobiles in India with revenues over US$ 38.9 billion. TATA Motors is a subsidiary of TATA Group, India’s biggest industrial conglomerate.
1.1 Background of the case The chosen company is Lenovo Group Limited which is a multinational technology company that is headquartered in Beijing, China. Established in 1988, Lenovo is the largest information technology enterprise in China, engaged primarily in the sale and manufacturing of personal computers, mobile telephone handsets, computer servers and printers, in China. It has been the market leader for seven consecutive years, commanding a 27 per cent share of the domestic PC market in 2003. It is also the market leader in the Asia Pacific region (excluding Japan), with a market share of 12.6 per cent in 2003.
LinkedIn Acquisition 1. What in your assessment are the most significant reasons driving Microsoft's purchase of LinkedIn? (250 words max) Ans 1) 1. Focus on enterprise software space: Microsoft has many in this regard ranging from Windows, Office 365, and Office Suite. Microsoft has utilized assets such as their surface tablets and Skype Communications into professional use-cases like Hololens.
1- Introduction This report will state and elaborate the idea and the concept of culture, cultural diversity as well as handling with cultural diversity in an organization. It will clarify and explain the advantages as well as disadvantages for a company having employees of different cultural backgrounds. Likewise, it will also explain significance of dealing with different cultures, influence of culture over the workers and style of management. Similarly, it will also discuss significance of cultural training and cultural diversity implications in managing an organization.