Merging and Acquisition. Business & Marketing Case Study (Case Study Sample)
Please read the whole lectures and readings before write the essay, these 4 case
studies all need to be discussed based on the understanding of the lectures.
The detailed I presented below is what I think is important but you may added
the information you think is important to make it more comprehensive.
The company’s information need come from its official website and the relevant
data need to be precise and standard. The reference of the data has to come
from the actual financial statement.
1) Recently Fiat Chrysler and Peugeot agreed to merge for nearly $50 billion.
Analyse the possible ways of financing such a big deal, compare and
speculate on the best possible option. Do you think the deal will be
successful? Why / Why not?
You may find useful information in lecture 3, it mentioned the acquisition
process , you may follow it describe the actual process in the case.
Then lecture 5 also mentioned financial model, it contains 4 steps it helps
answer 4 valuation ,financing and Deal structuring .
Lecture 8 also mentioned the forms of acquisitions. Choosing the right deal
structure. financing M&A option
2) Nokia, a Finnish-based award-winning smartphone company, was acquired
by Microsoft in 2013 for US$7.2 billion. A few months later, in 2014 Google
acquired Nest Labs for about $3.3 bn. In the context of M&A, synergy
represents the incremental cash flows generated by combining two
businesses. Identify the potential synergies you believe could be realized in
Google’s acquisition of Nest and in Microsoft’s acquisition of Nokia. Speculate
as to whether these acquisitions were successful or not. Please use the
relevant literature discussed in the course when applicable to strengthen
your arguments. Explain the rationale for your answer.
in lecture 2 it has mentioned the case of Nokia& Microsoft, why failed there
are 3 roles; roles of culture, role of environment ,role of management
synergies canbe find in reading Merger Motives and Merger Prescriptions
Kraft-Heinz vs Unilever Takeover Battle
On the 16th of February 2017, US food company Kraft-Heinz backed by three
Brazilian billionaires and US investor Warren Buffet, made an offer of $143bn to
takeover Unilever in what could be the second largest merger in corporate
history, after the $183bn takeover of Mannesmann by Vodafone in 2000.
Unilever, an Anglo-Dutch company, is one of the largest firms listed in Britain
and owns well-known brands including Persil, Dove soap, Ben & Jerry’s ice
cream, Pot Noodle, and Marmite. The offer was $50 a share cash and stock offer,
and represented -at that time- an 18% premium to the closing price. However,
Unilever rejected the offer. Unilever has a stable of well-known brands but sales
have suffered in some big emerging markets.
Discussion Questions. All questions carry equal marks:
1. Suppose that you are the Chief Executive Officer in Kraft-Heinz in
February 2017, critically provide a convincing analysis to your
shareholders to explain the motivation, and the synergies (i.e. strategic
and financial reasons) behind the offer made to acquire Unilever. To
strengthen your arguments use the financial statements of the previous
years (till 12/2016) and the relevant literature discussed in the class.
Lecture1 have motivation restructing activity
Lecture 8 financial strategies (leverage buyout is important)
2. In your opinion, why Kraft-Heinz offered a mix of cash and stocks to
acquire Unilever, and not only cash or only stocks? Do you think Kraft-
Heinz should make a higher offer? Why/Why not? Use the relevant
literature discussed in the course to strengthen your arguments.
Lecture 8 payment for merger
Lecture7 valuation of private companies
Lecture 4&5 valuation method of target company
Merging and Acquisition
Merging and Acquisition
Two companies merge due to increased competition in the market. Two companies that have similar products combine so that they can create a significant market share for their products or services. Furthermore, companies decide to merge so that they can create a significant opportunity for reducing costs. When companies combine, they frequently have the chance to combine location and decrease operating costs. The third reason why companies merge is for them to survive. Sometimes some companies are affected by harsh regulatory policies, which can even make the company collapse. For these companies to survive, they decide to merge with another company. When Fiat Chrysler and Peugeot agreed to merge for nearly $50 billion, the best ways of financing the deal include exchanging stock, taking on debt, issuance of corporate bonds and loans, and paying with cash (Nazarova & St, 2015). The company engages in the acquisition and merging so that they can grow, obtain knowledge, and spread new areas and increase their output.
Transacting stock is one of the commonly utilized financing deals. When a particular company decides to use this type of financing deal, it has to assume that it owns a hale and hearty balance sheet with a substantial stock contribution (Trautwein, 2013).
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