...Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc By: Jemaneh Bayou January 2008 Advisor: Abebe Yitayew (Asst. Professor.) A PROJECT PAPER SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES OF ADDIS ABABA UNIVERSITY IN PARTIAL FULFILLMENTS OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN ACCOUNTING AND FINANCE ADDIS ABABA UNIVERSITY SCHOOOL OF GRADUATE STUDIES Faculty of Business & Economics Department of Accounting & Finance Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc By Jemaneh Bayou Hailu January 2008 Approved by board of examiners Asst. Professor Abebe Yitayew Advisor Examiner ___________________ Signature ___________________ Signature Examiner ___________________ Signature Statement of Certification This is to certify that Jemaneh Bayou has carried out his project work on the topic “Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc” under my supervision. In my opinion, this work qualifies for submission in partial fulfillment of the requirements for the award of Degree of Masters of Science in Accounting and Finance. Signature________________ Abebe Yitayew (Asst.Professor) Project Advisor Statement of Declaration I declare that this project work is my original work. It has not been submitted for any degree/Diploma in any University. I have undertaken...
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...Group Name- Scholars Name | MBA Serial No. | Md. Gias uddin | 118 | Afroz Shabnam | 133 | Mehedi Hasan Saurav | 134 | Rashed Mahmud Shakil | 154 | Sanjay Bhattacharjee | 161 | Md. Ashraful Haque | 172 | Mst. Suraya Jahan | 179 | Chapter Objectives * Examine how international growth places demands on management and HRM * Identify factors that impact on how managers of internationalizing firms respond to these challenges * We cover the following areas: * Structural responses to international growth: The organizational context in which IHRM activities take place. Different structural arrangement have been identified as the firm moves along the path to international status – from export department through to more complex department such as the matrix, transnational, heterarchy, networked. * Control and coordination mechanisms: Control and Coordination aspects. Formal and informal mechanisms were outlined, with emphasis on control through personal networks and relationships, and control through corporate culture, drawing out HRM implications. * Mode of operation used in various international markets: The various modes-such as wholly owned, franchising, management contracts and international joint ventures- used by multinational for foreign market entry and expansion. Again, we attempted to demonstrate the IHRM implications of the various modes, although noting that most of the literature focuses on wholly owned subsidiaries...
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...an efficient tool not only for armed warfare, but serves as a viewpoint for business administration and victorious leadership in our modern age as well. Sun Tzu believed, “To win without fighting is best.” And the point of The Art of War is to assist the populace to learn negotiating conflicts and learn guidelines to succeed. Sun Tzu’s philosophy can serve as a guideline for many different war and management principles, including the philosophy of maneuver, purpose, offensive, surprise, the economy of force, mass, unity of command, simplicity, secrecy, deception, practicality, responsibility, practicality, shared objective, tactic, structure, system, staff, skill, style, innovation leadership and mergers and acquisitions. What I like about the words of Sun Tzu is that he is swift to the point. There aren’t a lot of verbose explanations, just very precise statements, which adds to the book’s efficacy. The thing that intrigued me the most about The Art of War were the insight into leadership and business that Sun Tzu’s philosophy provided. Anyone that has been in any type of leadership understands the truth of such words. If you are a weak leader, you will not be respected by those under you. If you are a strong leader, but do not have a strong staff that is able to support you, then your plan will fail. The thing that makes Sun Tzu’s words so great even today is that they are applicable principles to today’s business...
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... Corporate Strategy Cisco System: New millennium – new acquisition strategy? 1. What was unique in the way Cisco managed its acquisitions in the 90’s? During the 90’s, Cisco has based its growth strategy mainly on acquisitions. From the first acquisition of the company called “Crescendo” in 1993, Cisco has bought more than 45 firms until 1999. Cisco can be considered as unique in its way of managing its acquisition deals because of the methodology that they have created and the kind of expertise that they have developed. The Cisco’s acquisition framework focuses on 2 main steps: targeting and integration. § Targeting: In order to enter in niches markets, to acquire a technology, to add a product to its range or to reinforce a specific process, Cisco’s strategy was based on the purchase of smaller and innovative companies. The selection process includes 6 main criteria: -‐ size; focus mainly on small companies, -‐ growth; fast growing companies, -‐ strategy; Cisco is looking for focused companies with a strong expertise, -‐ entrepreneurial spirit, -‐ similarity in culture, -‐ and geographical proximity especially for the largest targets. Cisco is looking for good fit, complementarity of visions, quick wins for shareholders and long terms wins for all stakeholders. § Integration According to Cisco’s management, post-acquisition integration is key to create value. Cisco’s integration process was focused on three goals:...
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...Corona Beer "A multi-country strategy is appropriate for industries where multi-country competition dominates and local responsiveness is essential. A global strategy works best in markets that are globally competitive or beginning to globalize." Corona Extra has been the world’s fourth best selling beer in terms of volume in 2005 due to its strategy in differentiation. Corona marketing campaign of “fun in the sun” and its light and citrus flavor helps products to expand its target customers far beyond its competitors. However due to merger and acquisition that occur in the industry, Corona needs to adjust itself in order to sustain its growth and improve its competitive position. 5-Force Analysis Rivalry (High Threat) * There is competition from both domestic products and import products as well as threat from merger and acquisition which large company may dominate the industry as they might gain advantages from cost efficiency and market share after merging. New Entrants (Low Threat) * There is low threat from emerging entrants since the large companies will have advantages in economy of scale. Also new entrants will need to have heavy start-up cost of capital. Substitute (High Threat) * High threat from substitute because there are various kinds of liquor in the market. Altogether with non-liquor drinks in the market are also considered as substitutes for beer. Consumer (Moderate) * Since there is price sensitive for beer in the market, company needs to...
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...confidence. Because reliance on corporate boards to police themselves did not seem to be working, Congress passed the Public Accounting Reform and Investor Protection Act of 2002, commonly known as Sarbanes-Oxley Act, which enforced by Securities and Exchange Commission (SEC). (Hartman, L., DesJardin, J. 2011, p426) The collapse of Enroll, WorldCom, accounting frauds at Tyco and the passage of Sarbanes-Oxley have forced boards of directors, particularly at publicly-traded companies, to reassess how they do acquisition deals and on what basis they can represent to the shareholders that the deal is fair to all parties. (Andrew J. Sherman & Milledge A. Hart 2006, p87) In business there is one simple rule: grow or die. Companies on a growth path will take away market share from competitors, create economic profits, and provide returns to shareholders. Companies that do not grow tend to stagnate, lose customers and market share, and damage shareholder interests. Acquisition implies to the purchase of one company by another, afterward creating a larger single company. Such operations are an ordinary occurrence in the world of business, but...
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...- Lessons in Post-Merger Integration - Jan Daniel Laufhütte 2304958 Individual Written Case Study Report in Strategic Management IHS-3-422 London South Bank University 17/12/2003 Table of Contents List of Figures................................................................................. i Introduction ................................................................................... 1 1. The changing world automobile industry .............................. 1 2. Reasons for mergers and acquisitions .................................. 3 2.1. 2.2. Daimler-Benzs’ motives..................................................................... 3 Chryslers’ motives ............................................................................. 5 3. The Post-Merger Integration Structure................................... 7 3.1. 3.2. 3.3. Preparations for the merger .............................................................. 7 Integration Structure of DaimlerChrysler......................................... 7 Expected Synergies ........................................................................... 8 4. Cultural Issues ......................................................................... 9 4.1. 4.2. 4.3. Daimler-Benz’s Culture...................................................................... 9 Chrysler’s Culture ............................................................................ 10 Key Integration Problems and Post-Merger Business Culture ....
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...Discuss the approach used by Zappos. Why is the approach not used very often? What are the challenges and the benefits? Zappos was acquired by Amazon in 2009. What organizational changes do you believe occurred due to the acquisition and would continue to occur over time? Discuss the concept of motivation and Zappos. Would Zappos be a motivating place to work? Why? Why not? Your analysis must include supporting evidence. Zappos has a very unique approach to motivating its employees, which is spearheaded by its CEO Tony Hsieh. This approach includes a study of happiness, respect, and the company is centered on the idea of “a corporate culture of caring a priority”. Zappos is able to accomplish this using David McClelland’s acquired-needs theory; they motivate employees by taking a strong interest in each employee. This allows each of their employees room to grow, and if they employees see and feel this way then it is reflected in their performance and in how they treat each of their customers. This approach is very difficult to emulate and not used very often because a company has to invest a lot of time training, and trust in each of their employees to make this successful. This approach is a product of a couple of things: First, the CEO cares about his employees. This is made possible, largely because the company only employs around 1,500 people, and they are all located in a central location. Second, it is extremely difficult to measure the value of happiness. Shareholders...
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...Eyewear Market research for the eyewear industry Categories in eyewear include: * Contact lenses * Spectacles | Data and market analysis advances your knowledge of the industry and its competitive environment, ensuring accurate and focused strategies for your business. market research can be used throughout your entire organisation, including strategic development, marketing, mergers and acquisitions, and brand management. TRENDS * The year 2009 saw increased marketing efforts by the sector leader Bausch & Lomb, and also from Johnson & Johnson, as they looked to increase the use of contact lenses in India and dispel some of the concerns and apprehensions among potential users. Targeting the youth and young adult markets, these companies are focusing on the fashion and feelgood factors associated with using contact lenses rather than their functional benefits. COMPETITIVE LANDSCAPE * Bausch & Lomb Eyecare India, the subsidiary of the US-based multinational, leads the Indian contact lenses market, although its market share declined over the review period. Bausch & Lomb still accounts for more than half the retail sales of contact lenses in India, because of its strengths in the extended wear subsector and in distribution. By February 2009, the company claimed that Bausch & Lomb lenses were available in more than 5,500 outlets, and it aimed to expand this network to 7,000 outlets during 2009–2010. PROSPECTS * With spectacles remaining...
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...strategies can still be rare, for at least two reasons : 1. Given the broad range of international opportunities, firms may not compete head to head with other firm pursuing the same international strategies that they are pursuing and 2. Firms may bring valuable and rare resources and capabilities to the international strategies they pursue. Both direct duplication and substitution can affect the imitability of a firm’s international strategy. Direct duplication is not likely when firms bring valuable, rare and costly to imitate recources and capabilities to bear in their international strategies. Several substituts for international strategies exist, including some strategic alliances, vertical integration, diversification and mergers and acquisitions, especially if these strategies are pursued in a large and diverse single country market. However, some potential economies of...
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...and Willy’s Sour Straws, has helped the company maintain sales through a combination of aggressive pricing and trade incentives. Over the years, however, the company has tried to introduce new candy products without much success. As your strategy consultant, I’ll be presenting you an overview of strategic ideas I’ve gathered from key executives in your company. Subsequently, I’ll share with you my own strategic recommendations to help this company move forward. Merger Strategy Given the stagnation of sales and profits the last few years, Chester A. Wonka III, CEO, stresses the fact that the company’s portfolio is mainly supported by its two popular products: Willy’s Yummy Chews and Willy’s Sour Straws. Countless efforts, like pricing and trade incentives, have been done to improve sales, profitability and market share. Unfortunately, none of those have worked and he feels it’s necessary to make a bold, strategic move. Wonka proposes that the company considers a merger with the larger Swiss company that has made countless offers in the past. While this is indeed a bold move, we should weigh the benefits and risks: Benefits: * Becomes part of a larger conglomerate * Potential to expand into international markets (globalization) * Provision of resources, capabilities and marketing support (greater capacity) Risks: * Loss of pride...
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...1994 by James McGreen and Gary Starr. Located in Sebastopol, California, ZAP, an acronym for Zero Air Pollution, designs, manufactures and markets electric bicycles, scooters, motorcycles and other short-range electric transportation products. The company was originally started due to an interest in U.S. Electricar, who attempted the production of electric automobiles, and the increased attention for curbing fossil fuel emissions. ZAP Corporation sold its products through auto dealerships, catalogs, the internet and outlet stores. In addition, they were the first in history to offer stock directly to the public via the internet. ZAP’s successes over the years have allowed them to acquire a significant number of acquisitions in other companies. These acquisitions along with marketing agreements and ongoing product development resulted in over 10 different product categories including scooters, bicycles, motorbikes, pedicabs, underwater propulsion devices and neighborhood cars. II. SWOT Analysis Strengths: * Innovative product development * Company owned Retail Stores * Strong Global Distribution * Joint Ventures. * Strong Advertising | Weaknesses: * “Gut feeling” to forecast demand * Broad scope of products – ranged in size, sophistication, cost and complexity * Short on financial resources * Higher overall unit costs relative to key competitors | Opportunities: * China’s ban on further purchases of ICE (internal combustion engine) two-wheelers...
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...Krishna Bank. * 2008 HDFC Bank acquired Centurion Bank of Punjab. The swap ratio is expected to be around 1:25-30,” said a banking source. The merger will make HDFC Bank the country’s seventh largest bank after Bank of India (BoI) and ahead of IDBI Bank, from the current 10th position. The merger talks between the two banks began in January 2008 after the principal shareholders of CBoP – Bank Muscat with 14.02 per cent stake, Sabre Capital with 3.48 per cent stake and Kephinance Investment (Mauritius) with 6.13 per cent — decided to exit. 1) HDFC Bank Board on 25th February 2008 approved the acquisition of Centurion Bank of Punjab (CBoP) for Rs 9,510 crore. BENEFITS FROM THIS DEAL * The HDFC Bank, which currently spans India with its chain of 746 branches, will add to itself 394 branches of the CBoP to itself, to make its network bigger and stronger. The merger talks between the two banks began in January 2008, after the principal shareholders of CBoP – Bank Muscat with 14.02 per cent stake, Sabre Capital with 3.48 per cent stake and the Kephinance Investment (Mauritius) with 6.13 per cent stake decided to move away from this partnership. * The HDFC Bank is further expected to pay Rs 100 billion to Rs 120 billion in shares for acquiring the CBoP. In what claims to be the largest ever private bank merger, the share swap ratio stands at 1:29, that is every shareholder of CBoP will get one share of HDFC Bank for...
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...Fdiiretailwould mean a wider choice of products, lower prices for good and creation of employment. The move would also benefit farmers hugely. Farmers in India today receive only a small share of the end consumer price. An organised retail has the potential to drive efficiencies in this chain and increase price realisation for farmers by 10-30 per cent through sourcing directly or closer to the farm. You could soon have cheaper air tickets as well. The government has decided to allow 49 per cent FDI in Airlines. FDI will spur more investments, lead to expansion and mergers and acquisitions as well as open up jobs. However, experts say the sector needs more reforms to be attractive enough for foreign investment. The government on Friday relaxed the FDI limit in direct-to-home (DTH), Cable Networks and teleports to 74 per cent from 49 per cent earlier. The would mean you would have a a wider range of entertainment channels to enjoy. the cabinet has proposed raising the FDI cap from 26 per cent to 49 per cent for the insurance sector. This could help in improving the quality of insurance agents and reduce mis-selling of products. The move would also aid in a better evaluation of claims and help reduce the rejection of policies. pensioners too have reason to cheer with the cabinet proposing FDI in pension. The cabinet cleared a bill to allow up to 49% foreign investment in the pension industry. This would mean pension products would be made available in the private sector as well...
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...Keller graduate school of management | Acquisition recommendations for the merger of Medco and Merck | Professor Jeffery Hardin/ FI 561 | | Carthenia Turk | 3/18/2013 | Recommendations are being prepared to be present to the board of directors regarding Merck’s acquisition of Medco. I have gathered information form several key employees within the organization in order to determine whether the merger will be profitable and allow the company continued growth. This analysis will include supporting calculations regarding the two companies becoming one. | Ladies and gentlemen I have been given the task of providing my recommendations as to our company (Merck), acquiring Medco. An evaluation of both companies will be completed so that I can provide accurate feedback as to the pros and the cons of the proposed merger. There will also be an analysis performed to determine the cost effectiveness and the potential synergy of the combined companies. Included in this recommendation you will find a (DCF) discounted cash flow, this will determine whether or not the post-merger company will have the ability to overcome any opposition that be in question. I will also be discussing the proposed strategy that we intend to take, should we agree to the merger. We will explore what works well for each organization and the best way to combine those efforts to maximize on continued growth for the organization. We here at Merck, being the world’s largest drug manufacturer...
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