1) TATA ACQUIRES JAGUAR AND LAND ROVER
Reasons For The Deal:
Jaguar sales dropped 33% in the US and Europe in the first two
months of 2008.
Land Rover sales fell by 13% in the US and around 7.7% in
Europe during the same period.
Ford had lost 15.3 Billion dollars over the 2 year period and it
responded by shutting down its plants and slashing its
workforce in North America by more than 40,000 workers.
Ford sold Jaguar and Land Rover as a package since the
engineering, purchasing and distribution of the two brands
have become interdependent as Ford tried to find efficiencies
running the business. Jaguars and Land Rover are
manufactured at a common plant today.
The Deal:
Ford sells JLR to Tata for in March 2008 just over 1bn just a
few months before a collapse in global demand in the
international car market
Tata financed the takeover with $3bn of new long-term loans
The price paid by Tata was approximately half of what Ford
paid to buy Jaguar and Land Rover.; + Ford had continued to
incur heavy losses in Jaguar as it failed to turn the business
around.
The deal took over a year to agree which may have helped
with the post-merger integration. Tata 1ecognized that it
would continue to need support from Ford who are a main
supplier of car components to the two brands.
No significant change proposed to the businesses by Tata. They
claimed that staff, trade unions and the UK government had
been kept informed about the proposed takeover and
supported the move.
The deal has been endorsed by trade unions, which secured a
commitment from Tata to continue with JLRs production plans
until the end of 2011. This includes development of new
models.
2) COMCAST TIME WARNER CABLE
Background:
On November 22, 2013, it was widely reported that Comcast was
seeking advice on a possible bid for Time Warner Cable. Charter
Communications was also thinking of making an offer. Charter made
a total of three attempts to buy Time Warner, offering $37.4 billion
on January 13, 2014. Comcast's $45.2 billion offer effectively won
Comcast the bidding war, though Charter continued to challenge the
acquisition by forecasting difficulties with the regulatory review
process. By April 27, however, Charter had backed off its opposition
to the deal after reaching a deal with Comcast in which Charter will
acquire a portion of Time Warner Cable's subscribers.
Description:
Under the form of the deal, Comcast would acquire Time Warner
Cable by exchanging each of Time Warner Cable's current 284.9
million shares for 2.875 shares of Comcast's CMCSA stock. In
addition, Comcast will sell 1.4 million Time Warner Cable subscribers
to Charter Communications for about $7.3 billion. Comcast would
also divest 2.5 million subscribers to a new public company which
will be owned 66% by Comcast shareholders, and 33% by Charter,
which will manage its network and customers. Finally, Comcast and
Charter will swap about 1.6 million subscribers with each other.
Opposition:
Prominent critics of the deal include technology expert Susan P.
Crawford, U.S. senator Al Franken of Minnesota, the city of Lexington,
Kentucky, the city of Worcester, Massachusetts, and U.S.
representative John Conyers of Michigan.
Public opinion on the merger is generally negative. A March 2014
Reuters/Ipsos poll found that 52% of Americans believed the deal
was bad for consumers, while 22% thought it would be beneficial. An
April 2014 poll conducted by Consumer Reports found that the
merger was opposed by 56% of the public and supported by 11%,
with 32% having no opinion, with 74% of respondents agreeing that
a merger "will result in higher Internet and cable prices for
everyone."A coalition of 56 consumer-advocacy and public interest
groups have expressed opposition to the merger, including both the
Writers Guild of America, East and Writers Guild of America, West,
the Media Alliance, Public Knowledge, and the Parents Television
Council. Outside of this group, Consumer Watchdog has also opposed
the merger.
Some companies within the industry have expressed opposition to
the merger, including DirecTV, Netflix, and Cogent Communications.
Prior to reaching a deal to acquire some subscribers of the merged
company, Charter Communications also opposed the merger.
3) AOL AND TIME WARNER MERGER
A decade ago, America Online merged with Time Warner in a deal
valued at a stunning $350 billion. It was then, and is now, the largest
merger in American business history.
Market Situation Prior To The Merger:
AOL had 27 million subscribers.
Competing with the likes of Prodigy and the commented
CompuServe into a media conglomerate.
Since 1996, it began its transformation from computernetworking company to media giant.
AOL's stock price increased 1,468% from October 1996 to
January 2001.
AOL Merged With Time Warner:
On 10th JAN, the internet service company AOL & the media
giant Time Warner.
In 2000, AOL purchased Time Warner for US$164 billion.
The Federal Trade Commission cleared the deal on December
14, 2000, and gave final approval on January 11, 2001.
Due to the larger market capitalization of AOL, they would own
55% of the new company while Time Warner shareholders
owned only 45%.
Reasons For Merger:
For Warner, merging with an existing company was a more
effective way.
Creating an own Internet branch would be both very costly and
time intensive.
The combination of Time Warner's broadband systems, media
contents and subscriber base would create significant
synergies and strategic advantages with AOLs online brand,
Internet infrastructure and own subscriber base of 30 million
customers.
For AOL, the merger was about technology.
AOL did not have a strategy for the next generation of internet
users who would require broadband access.
For AOLs Board of Directors, the portfolio of brands created
with the merger of the two companies would cover the full
spectrum of media entertainment and information.
AOL computer services technology and, over all, they assured
that the new business would be benefited from huge operating
synergies.
Transactions made since the AOL-Time Warner merger:
Wrestling was not in the network's best interest.
The fifty percent share in the cable channel Comedy Central
was sold to Viacom.
AOL/Netscape's long running litigation against Microsoft was
settled out of court.
On March 31, 2006 Time Warner sold the Time Warner Book
Group to French publisher Hachette Livre, of the Lagardere
group.
On February 23, 2006, Turner South, a regional sports and
entertainment network in the south, was sold to News Corp's
Fox Cable Networks group.
On September 12, 2006, Time Inc. announced that Time4
Media, a group of men's interest magazines
In the summer of 2008, the Reader's Digest Association sold
QSP to Time Warner subsidiary Time Inc. for $110 million.
March 2009, Time Warner Cable was divested from the
company in a spin-out.
On August 26, 2010, in Chile, Time Warner Company took the
full control of Chilevisin, a channel owned by Chile's President
Sebastin Piera.
Reasons For Failure
One of the main reasons is that AOL basically never was an
equal counterpart to Time Warner.
At the time of the merger AOLs stocks were overvalued mainly
due to the Internet bubble.
An estimated profit of $ 160 million evoked suspicion and
anger among shareholders.
Another reason why the merger failed is that in the time after
the merger AOL and Time Warner failed to implement their
visions and communicate them.
They even lacked the ability to recognize new trends in the
digital industry.
The main trends AOL Time Warner missed was the importance
of highly personalized web services.
A final reason for the failure is the fact that AOL and Time
Warner were not able to encourage a climate within the
companies to initiate the synergies that were proposed.
4) DISNEY PIXAR
Pre Acquisition Structure:
Disney Pixar were in a partnership agreement since 1991
After the success of toy story, Disney- Pixar had a coproduction agreement in 1997
Post Acquisition Structure
Disney acquired Pixar for approximately $7.4 billion
in an all-stock deal.
The acquisition was completed May 5, 2006
Steve Jobs, who was the majority shareholder of
Pixar with 50.1% became Disney's largest individual
Share holder with 7%
Conditions were laid out as part of the deal to
ensure that Pixar remained a separate entity,
Pixar name was to continue
Branding of films made post-merger would be
"Disney-Pixar"
Acquisition Why?
The four main reasons for making an acquisition
include:
To acquire complementary products, in order to
broaden the line
To acquire new markets or distribution channels
To acquire additional mass, and benefit from
economies of scale
To acquire technology, to complement or replace the
currently used one
Factors Leading Towards Acquisition
Losses arising due to online ventures
Problems with management of Disney led Pixar to step down
and also led to conflicts
Problems due to Toy Story 2 after its
theatrical release.
Problem related to the sequel of Toy
Story 3.
Personal grievances between Jobs and Eisner
Changes After The Relationship
In march 2005, the Disney Board elected Iger as Companys
CEO.
Iger asked for Disneys content to be distributed over the
internet through iTunes.
In Oct 2005 Iger and Jobs signed a deal to sell TV shows
through iTunes.
Started with Desperate Housewives and lost.
The acquisition gave Disney ownership of the worlds most
famous computer animation studio and its talent.
The timing was also perfect for Disney as its own animation
films were failing.
The deal brought the technology co. Apple closer to Disney.
For Pixar it was a good move to face competitors like
DreamWorks & 20th century fox.
The deal gave Apple iTunes more video content to offer.
As of Jan 2006, Disney sold 1.5 million videos of TV serials.
5) GLAXO WELLCOME -SMITHKLINE BEECHAM
Glaxo Wellcome was a British multinational pharmaceutical company
in London, United Kingdom that merged with SmithKline Beecham in
2000 to form GlaxoSmithKline.
In 1999, Glaxo Wellcome was the worlds third-largest
pharmaceutical company by revenue, with a global market share of
around 4 per cent. It was the worlds largest maker of pharmaceutical
products for the treatment of asthma and HIV/Aids.
In 1843, Thomas Beecham launched his Beechams Pills laxative in
England giving birth to the Beecham Group in St Helens, Lancashire
for rapid production of medicines in 1859. The original factory was
closed in 1994 and passed to the local college for re-development. By
the 1960s, Beecham was extensively involved in pharmaceuticals.
It was established in 2000 by the merger and acquisition of Glaxo
Wellcome and SmithKline Beecham.
GSK has a portfolio of products for major disease areas mainly
including asthma, cancer, virus control, infections, mental health,
diabetes and digestive conditions. It also has a large consumer for its
oral healthcare and nutritional products, drinks and over-thecounter medicines, including Sensodyne, Boost, and Horlicks etc.
GSK pleaded guilty to criminal charges and agreed to pay $3 billion as
a settlement of the largest health-care fraud case in the U.S. and the
largest payment by a drug company in the US in July 2012.
6) VODAFONE MANNESMANN
Mannesmann was acquired by Vodafone Group Plc. in 2000 in a taxfree stock exchange of 53.7 Vodafone shares for each share of
Mannesmann. This was a controversial takeover, since never before
in Germany had a large company been acquired by a foreign owner.
This was a hostile takeover, but the merger was backed in a private
deal between Mannesmann management and Vodafone. The
acquisition was led by Vodafone's Chief Executive, Chris Gent, and
Goldman Sachs' Scott Mead, who was then the chief advisor on the
deal.
Under the terms of the deal, Mannesmann sought assurances from
Vodafone that the Mannesmann brand and name would be kept
under the new owners. This was agreed and the deal was announced.
However, not long after this, Vodafone reneged on the deal and
rebranded.
Rebranding to Vodafone
The name Mannesmann ceased to exist in the telecommunication
branch soon after the deal with Vodafone. As a result:
Mannesmann Arcor became Arcor and subsequently Vodafone D2
D2 Mannesmann became D2 Vodafone and subsequently Vodafone D2