17. Современные предприятия. Слияния. Поглощения. Процедура оформления. Основные факторы, препятствующие успешному слиянию.

As business and world become increasingly competitive, more and more companies have to strengthen their operations to remain profitable. Companies can go this in a number of ways, including:

Joint venture- 2 or mere companies agree to collaborate and jointly invest in a separate business project. Combine their strength in one specific area.

Merger- 2 companies, often in the same industry, come together to form one company. Reasons: to increase market share, cut costs in certain areas-research and development, increase budget, less taxes, brand strething.

Acquisition or takeover- one comp accumulates enough of another comp’s shares to take over control and ownership.

Companies need to introduce new products and sеrviсеs  for large companies there is a choice:

• innovating - developing new products, services or markets themselves

• buying another, smaller соmpаnу with succеssful products.

• Merger – when another company is to big to acquire, OR…..

Reasons for taking over or combining with other companies:

1. reinforcing your company’s position;

2. reducing competition;

3. rationalizing production;

4. diversifying products or markets;

5. optimizing the use of а plant or invested capital;

6. searching for synergy (together they’ll produce more 2+2=5)

A company that wants to grow or diversify can:

Launch a raid – to buy a large quantity of another company’s shares on the Stock Exchange: a “dawn raid” is buying shares through several brokers early in the morning before the market has time to notice the rising price and before speculators join in, this will increase the share price and may persuade shareholders to sell for the raider to take control of the company.

If a raid isn’t successful, a predator can make a takeover bid – an offer to a (pray) company’s shareholders to by their shares at a particular price during a particular period. (minority stake  want to gain a majority stake.)

Friendly takeover has the consent of the directors of the company whose shares are being acquired

Hostile takeover – is undertaken against the wishes of the board of directors.

Defenses: Poison pill – an action taken to repel a raider, such as changing the share voting structure, or the board of directors, spending all the company’s cash reserves. Can find a White knight – another buyer whom they prefer

When Egos Collide:

Forming an alliance or joint-venture, Merger – combining as equals

High risks of failure: Used to be 2 headquarters  after the merger one is closed: should propose higher salaries, perks(longer paid holidays and better health insurance), explain that alliance will bring a new customer base and improve the financial health of the company. Cross-border mergers cross-cultural misunderstandings. Switch to new activities- new jobs created.

Corporate egos are inevitable in a business culture that prizes drive (стремление к победе), determination and leadership above all. Strength of personality + ability to outmaneuver(обойти ) others. It is impossible to make them work together unless one personality is prepared to step down or take a back seat or relinquish бросить old role in favour of new opportunities. Compromise is essential if mergers btw 2 powerful corp-ns are to work to advantage of both. Risk of takeover instead of merger (when one partner undervalue the other)

The most common idea of all mergers- let’s increase revenue.