...Stakeholder mapping If OneLife are to go ahead with the take-over from Company F, many people involved internally and externally will be affected. To help categorise the different stakeholder groups, Mendelow’s (1991) power interest matrix will be used. This will help to highlight the different stakeholders involved and priorities the outcomes related to their power and interest in the organisation. (Adapted from Mendelow, 1991) Low Power /Low interest * Customers /Members of OneLife The customers of OneLife, although being the most important aspect of the business due to the revenue they provide, with regards to the take-over would have little effect on the situation. If the company name and image were to be maintained then the customers influence will be minimal as business would continue to operate in the same way, unless the new company decide to change any of the fundamental policies or prices in the membership. Loyal customers can be disappointed as they do not like the new management or brand. High Power/ Low Interest * Government The government although having high power with relation to granting access to new sites will have little effect on the take-over if operations were to continue. They may be affected if the new owners decided to expand further and open new sites. * Employees Employees often perceive a takeover as a threat and can lose motivation. The change of management can reduce employee’s efficiency. In many cases employee can lose...
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...MERGERS AND ACQUISITIONS LITERATURE REVIEW LUKE WALTON Table of Contents Abstract 3 Introduction 3 Background and motivation 3 Objective or aim of this literature review 4 Findings from current available literature 4 Issues from current research 5 Contribution to current literature and stakeholders 5 Section One 6 Motivation of M&A’s 6 Synergy 6 Agency theory 7 Hubris 7 Relationship between motives and financing 8 Section Two 9 Payment methods 9 Financing hierarchy vs. market conditions 9 Differing views on leverage 10 Valuation and the agency problem 10 Managerial ownership 11 Section Three 12 Performance of mergers and acquisitions 12 Performance indicators 12 Methodology 13 Profitability 13 Performance due to the motivation 14 Conclusion 15 Summary and findings 15 Areas of future research 17 Qualitative research in M&A’s 17 Decision making process for methods of payment 17 Unified methodology in determining M&A performance 17 References 19 Abstract Mergers and acquisitions have become a common practice for firms as a mean to expand and increase profitability. Existing evidence is still unable to strongly determine what factors make a successful M&A due to inconsistency in data and findings. This paper aims to provide an insight to the steps included in the M&A process by comparing existing literature and hopes to suggest key determinants of a successful M&A transaction. Evidence shows...
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...Case Study analysis TATA-CORUS:- Q.1. What are the benefits of the TATA-CORUS merger deal to the stakeholders of TATA Steel and the stakeholders of CORUS? Evaluate the post-merger security with the help of CAPM Model. A.1. On January 31st, 2007 India’s Tata Steel acquired Corus, the erstwhile British Steel Major at a price of 608 pence per Corus share totaling $12.1 billion/ Rs 54,000 crore/ £6.1 bn, which was five pence per share higher than the offer of Brazil’s CSN (Companhia Siderugica Nacional). The deal is the largest Indian takeover of a foreign company, and creates the world's fifth-biggest steel company from the present 56th rank. Benefits of TATA-CORUS merger deal to the stakeholders of TATA Steel Short-Term Implications Investors with a one-to-two year perspective may find the Tata Steel stock unattractive at current price levels. While the potential downside to the stock may be limited, it may consolidate in a narrow range, as there appears to be no short-term triggers to drive up the stock. The formalities for completing the acquisition may take three to four months, before the integration committees get down to work on the deal. In our view, three elements are stacked against this deal in the short run: 1) Equity dilution: The financing of the acquisition is unlikely to pose a challenge for the Tata group, but the financial risks associated with high-cost debt may be quite high. Though the financing pattern is yet to be spelt out fully, initial...
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...CASE 5: Acquisition of Mannesmann by Vodafone -Jatin Mehta B12085 Case summary Vodafone AirTouch is UK’s leading cellular service provider. By the late 1980s, the company started expanding its global reach through series of acquisitions, joint-ventures and by 1999 had grown to be the largest mobile company in the world. Sales and operation profits were up by 34% and 17% respectively by September 1999 and Vodafone had captured markets across US, UK and continental Europe. To increase its presence in all-important US market, it acquired AirTouch Communications in January 1999 and later forged a 55-45 partnership with Bell Atlantic. On the other hand, Mannesmann, formed in 1890 as a producer of seamless steel tubes, entered the telecommunications industry in 1990 by establishing and operating D2, the first private mobile phone network in Germany, and then it quickly became one of Europe’s largest telecommunications companies. By 1999, it had gained a leading position in four of the largest European mobile markets but remained mostly in continental Europe until 2000 when it acquired UK’s third biggest player – Orange and did not look to expand in US or Japan in near terms. It intended to a single supplier of integrated service in terms of fixed lines, wireless and internet activities and hence keep increasing ARPU. As a whole, the cellular industry itself is expected to see exponential future growth of 45% and above upto 2003. The current penetration...
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...comparative advantage by integrating with each other. Today, cross-border mergers and acquisitions (M&A) have rapidly increased, reshaping corporate leadership and unlocking corporate value. The Thai billionaire Charoen Sirivadhanabhakdi’s takeover of Fraser and Neave (F&N), the largest region takeover, has illustrated the strategic corporate governance of both the acquirer and target firms, the reaction of their leaders and the evaluations of F&N’s worth. Furthermore, this transaction also had significant impacts on various key stakeholders – F&N’s Board of Directors, TCC Assets Ltd and Thai Beverage PCL, Overseas Union Enterprise (OUE), and other F&N’s shareholders such as Kirin Holdings Co. Nowadays, most corporate leadership consists of two main management bodies, which are the Board of Directors and the Board Executive Committee. In F&N, Board of Directors acts as a crucial internal governance to set strategic directions, to oversee management and most importantly, to protect the interests of its shareholders. During merger transactions, they are supposed to monitor the transactions so as to maximize its shareholders’ wealth. In October 2012, F&N directors rejected Mr Charoen Sirivadhanabhakdi's takeover offer because the offer price of $8.88 per share (which valued F&N at S$7.2bn) is at the low end of the range of the estimated market value of between $8.30 and $11.22 (Yap, 2012). F&N’s advisor, JP Morgan Chase also described the offer...
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...company actions that increase their own financial returns. Definition: A company that uses the shareholder approach to conducting business typically views the impact of business operations on profit. In addition, the length of concern for changes in business operations is usually short-term; such as focusing on meeting quarterly or annual results. Attributes: * Shareholders are primarily concerned with the company’s bottom line. * In a traditional business models, shareholders have the primary influence on the company’s strategy, usually resulting in business model with the foremost objective to increase the company’s stock value. In a shareholder business model, a company only addresses the needs and concerns of four parties: investors, employees, suppliers, and customers; with investors and customers receiving the most attention. Stakeholder approach: To make an analogy, stakeholder and shareholders are like sparkling white wine and champagne. All champagne is sparkling white wine, but not all sparkling white wine is champagne. Similarly, all shareholders are stakeholders, but not all stakeholders are shareholders. A stakeholder is anyone that can be affected by a company’s actions, objectives, and policies. This includes both internal stakeholders, such as employees and managers, and external stakeholders, such as shareholders, suppliers, customers, surrounding communities, creditors, the government, to name a few. The term’s common use came about only after...
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...innovate biopharmaceutical as a medicinal business such as Pfizer are subject on their ethical behaviour. Likewise, Pfizer is a Pharmaceutical firm that have recently been question on their ethical behaviour and standards. The organisation was unsuccessful on their takeover bid on British company AstraZeneca, due to their recent scandals on animal testing, testing drugs on children and bribery issues to resolve their illegal activities (paying 60 million to settle their charges). Each businesses should take into consideration their ethical standards and corporate social responsibility (CSR) . Therefore, it is inevitable to maintain sustainability in order to achieve good public image and reputation within their stakeholders. This report will examine the ethical behaviour including the Corporate Social Responsibility of Pfizer, M&S and Shell Global Plc. Pfizer primary mission is to improve the health welfare of each of its stakeholders needs and wants (Pfizer, 2007). The company uses science as a mechanism to create ways of establishing standards on their safety, quality and values which results in ways of expanding and producing medicines. The vision of the company is to prevent the wellbeing of its stakeholders and prevent illness through consistent research of bringing up treatment and cures. Historically, the firm existed more than 150 years cooperating with government, healthcare...
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...Governance: 1 Cadbury Report Definition of Corporate Governance: 1 BusinessDictionary.com Definition of Corporate Governance: 1 Why is it important? 3 Why was it in the news recently? 3 Literature Review: 4 Agency Theory: 5 STAKEHOLDER THEORY 7 Stewardship theory: 10 Motivation: 10 Identification: 10 Policies: 10 Consequences: 11 Theory- Resource Dependence: 11 Principles: 12 Benefits of Corporate Governance: 13 Definition of 'Agency Problem': 14 Investopedia explains 'Agency Problem': 14 Agency Relationship and Agency Costs: 14 Conclusion: 23 Agency Problems Are Mitigated by Good Systems of Corporate Governance 23 Legal and Regulatory Requirements: 23 Compensation Plans: 24 Board of Directors: 24 Monitoring: 25 Takeovers: 25 Shareholder Pressure: 25 OECD Definition of Corporate Governance: "OECD defines corporate governance as follows: “Procedures and processes according to which an organisation is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organisation – such as the board, managers, shareholders and other stakeholders – and lays down the rules and procedures for decision-making." Financial Times Definition of Corporate Governance: "How a company is managed in terms of the institutional systems and protocols meant to ensure accountability and sound ethics. The concept encompasses a variety...
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...Introduction Kraft Foods Group is the largest food and beverage company headquartered in North America and the second-largest in the world after Nestle. As company as large as Kraft Foods Group, it has enough capability and liquility to help the society stakeholders along the world with $19 billions in annual sale. Society expectations are rising and changing nowadays. Kraft should considerate about the expectation and needs of stakeholder when operated its business. Ignoring the expectation of society will bring much negatives impact to the company such as sales going down, reputation damaged, etc. This paper will review the social performance of Kraft Foods and the impact to its stakeholders : the communities, consumer and employee with the aspects of equity and equality and community building. Kraft Fight Hunger Kraft Foods has been proactive in stakeholder management and did well in charity and donation every year for the people who in need and involve themselves in philosophy programmes. Top priorities for Kraft Foods and its Foundation are fighting hunger, malnutirtion and promoting healthy lifestyles around the world. Kraft Foods has championed the fight against hunger for more than 30 years and donated more than $1 billion in cash and food. Since 1997, they have provided more than one billion serving of food to those in need. In 22 August 2010, Kraft Foods launched an integrated marketing campaign named “huddle to fight hunger” to encourage charitable giving to nonprofit...
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...Comp3120 Assignment 1 SAP Implementation Review Yuan Tan, u4571547 V1.0 Final Table of Contents Table of Contents 1 1 Introduction 2 2 Business Context 2 2.1 Client Background 2 2.2 Operational Context 2 2.3 The Need for Change 3 2.4 Description of SAP 3 3 Business Investment Decision 3 3.1 The Case for SAP 3 3.2 Evaluation 4 4 Implementation 4 4.1 Approach & Rationale 4 4.2 Key Business Events 4 4.3 Key Implementation Events Affecting Performance 5 4.4 Status at Time of Go-Live Decision 5 4.5 Evaluation 5 5 The Go-Live Decision 6 5.1 Key Criteria 6 5.2 Recommendation 6 6 Expected Outcomes and Potential Takeover Impacts 6 6.1 Expected Outcomes 6 6.2 Potential Impacts of a Takeover 6 7 Lessons Learned 6 1 Introduction In 1997-1998, manufacturing company AMP of Canada implemented the Enterprise Resource Planning suite SAP to replace a critical business system, the heavily customised and Y2K non-compliant JBA( Harold Kerzner Project Management Case Studies, 3rd Edition, Wiley). By September 1998 AMP of Canada faced a critical decision-point: whether to go live with a basic SAP implementation which still faced problems in testing and training( Harold Kerzner, Instructor’s Manual Accompanying Project Management Case Studies, 3rd Edition, Wiley). This report reviews the case studies outlining AMP of Canada’s situation with a view to: Appraising the decision to invest in SAP; Evaluating the suitability of the implementation approach taken; Assessing...
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...mechanisms in providing a solution for the corporate governance problem. Apart from this, particular emphases are given to the special conflicts arising from the relationship between managers and shareholders in companies with large ownership diffusion, the issue of managerial entrenchment and the link between firm value and corporate governance. Keywords: agency theory, corporate governance, ownership structure JEL Classification: G300 1 1 Introduction Recent financial scandals associated to accounting and other frauds allegedly blamed to top company managers (e.g. Enron, Worldcom, Adelphia) have brought into public light the recurring question of whether companies are managed on the best interests of shareholders and other company stakeholders such as workers, creditors and the general community. A point that has been made frequently is that top managers may possess too much power inside their companies and that a general lack of accountability and control of their activities is...
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...business environment and strategy. 1. What external forces and industry conditions have had an impact on Disney's performance over the years? 2. How did the internal organization and culture at Disney influence its performance? 3. How has Disney strategically responded to its competitive environment and internal capabilities? You have been asked to present a five-minute overview of the root causes of Disney's governance issues. The content of this brief presentation should achieve the following goals. 4. Identify the causes and consequences of the Board of Directors' ineffectiveness. 5. Highlight other governance weaknesses that have made Disney vulnerable to managerial opportunism. To be prepared for the ensuing discussion, you'll also need to be familiar with the following items. 6. How have governance mechanisms at Disney been used in the past, and what was their effect? 7. What unprecedented maneuvers were made by Disney stakeholders to overcome internal governance weaknesses? During the discussion, you should be able to demonstrate an insightful look at Disney's situation, make recommendations for establishing effective governance practices, and support the need for governance mechanisms despite the appearance of performance success. STRATEGIC MANAGEMENT INPUTS AND ACTIONS 1. What external forces and industry conditions have had an impact on Disney's performance over the years?...
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...tea and vitamins among others. A quick glance at the financial statements its net income after tax has been growing significantly for the last four years. The company reported a net income of 146, 245, 342 and 465 million the years 2009 up to 2012 respectively (Whole Foods Market Inc. 2013). 1. Company’s financial performance for 2010 The company did not offer any dividends to stockholders for the year ended September 2010. The stakeholders philosophy at Whole Food is customer first then the rest partake to what remains. The other stakeholders such as stockholders, employees, environment, suppliers and the community share on the remaining benefits. The company believes in meeting values of all stakeholders rather than the common approach by many firms where the needs/interests of shareholders come first. Many organizations have tended to focus on the interests of shareholders at the expense of the rest (Maguire, 2007). The company focuses on a harmony of interests approach in managing stakeholder’s expectations since they take all stakeholders to be important. In a nutshell, Whole Food Market synergizes contribution of employees and owners to provide value for the consumer. In pursuant of the philosophy, Whole Food has received awards in the best company to work for, recognized as a leader...
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...Ben & Jerry’s Homemade Inc. Case Study Case Summary This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case requires a discussion of fundamental firm objectives and the implications of a non-traditional corporate orientation; one needs to review the development of Ben & Jerry's strong social consciousness and the takeover defence mechanisms that maintain management's control on company assets. One is required to estimate the economic cost of its social agenda, and evaluate the implications of takeover defence strategies. Ultimately, we have to take a position on whether Ben & Jerry's should continue to independently pursue its social agenda or accept one of the attractive takeover offers and accept a shift toward greater profit orientation. Company Overview Ben & Jerry's Homemade, Inc., the Vermont-based manufacturer of ice cream, frozen yoghurt and sorbet, was founded in 1978, with a $12,000 investment ($4,000 of which was borrowed). It soon became popular for its innovative flavours, made from fresh Vermont milk and cream. The company currently distributes ice cream, low fat ice cream, frozen yoghurt, sorbet and novelty products nationwide as well as in selected foreign countries in supermarkets, grocery stores, convenience stores, franchised Ben & Jerry's scoop shops, restaurants and other...
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...Ben & Jerry’s Homemade Inc. Case Study Case Summary This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case requires a discussion of fundamental firm objectives and the implications of a non-traditional corporate orientation; one needs to review the development of Ben & Jerry's strong social consciousness and the takeover defence mechanisms that maintain management's control on company assets. One is required to estimate the economic cost of its social agenda, and evaluate the implications of takeover defence strategies. Ultimately, we have to take a position on whether Ben & Jerry's should continue to independently pursue its social agenda or accept one of the attractive takeover offers and accept a shift toward greater profit orientation. Company Overview Ben & Jerry's Homemade, Inc., the Vermont-based manufacturer of ice cream, frozen yoghurt and sorbet, was founded in 1978, with a $12,000 investment ($4,000 of which was borrowed). It soon became popular for its innovative flavours, made from fresh Vermont milk and cream. The company currently distributes ice cream, low fat ice cream, frozen yoghurt, sorbet and novelty products nationwide as well as in selected foreign countries in supermarkets, grocery stores, convenience stores, franchised Ben & Jerry's scoop shops, restaurants and other venues. Objective...
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