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6.Make the list of warnings provided in Text b.

7.Translate into English.

  1. Коли я хочу розширювати свій бізнес, це означає, що я хочу заробити більше грошей.

  2. Інколи ви змушені розширюватися.

  3. Чи розширення те ж саме, що диверсифікація?

  4. Я повинен збільшити свої позики або залучити капітал іззовні.

  5. Інколи вашому бізнесу може не вистачити отриманих кредитів.

  6. Диверсифікація часто означає новий потік прибутків.

  7. Обидва види бізнесу можуть користуватися тими самими засобами і навіть тим самим персоналом.

  8. Вони не мусять використовувати той самий персонал.

  9. Компанії не повинні витрачати свої ресурси надто ощадливо.

  10. Позитивні сторони нового бізнесу часто переважують недоліки.

Unit 16 changes (part two)

Learn the active vocabulary of the Unit and be ready to use it in your further work.

merger

takeover

joint venture

takeover bid

to gain a majority

a raid

to acquire

acquisition

solid relationships

acute

major job cuts

a friendly bid

economy of scale

a hostile bid

a white knight

poison pill defence

rival

threat

international scale

redundancy

(to be redundant/ to make redundant)

merit

monopoly power

prominent advantage

beverage

to rescue

job losses

stock exchange

stock

capacity

outsourcing

delegation of tasks

external entity

elimination

markedly lower

workforce

drawbacks

offshoring

blue /white collar job

Text a Mergers and Takeovers

In the modern business world, the ownership of companies often changes. This can happen in different ways:

∙ a merger: this is when two companies join together to form a new one (e.g. Exxon and Mobil, America Online and Time Warner).

∙ a takeover or acquisition: this is when one company buys another one (e.g.Vodafone and Mannesmann, Daimler-Benz and Chrysler).This can happen in two ways. Firstly, a company can offer to buy all the shareholders' shares at a certain price (higher than the market price) during a limited period of time. This is called a takeover bid. Secondly, a company can buy as many shares as possible on the stock market, hoping to gain a majority. This is called a raid.

Investment banks have mergers and acquisitions (M&A)departments that advise companies involved in mergers and takeovers.Companies can also work together without a change of ownership. For example, when two or more companies decide to work together for a specific project or product, this is called a joint venture. An example is Sony Ericsson, which makes mobile phones.

There are two types of takeover bid. If a company's board of directors agrees to a takeover, it is a friendly bid (and if the shareholders agree to sell, it becomes a friendly takeover). If the company does not want to be taken over, it is a hostile bid (and if successful, a hostile takeover). Companies have various ways of defending themselves against a hostile bid. They can try ro find a white knight - another company that they would prefer to be bought by. Or they can use the poison pill defence ("eat me and you'll die!') which involves issuing new shares or a big discount.

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