Transcript Document

Corporate alliances and
acquisitions
Companies can strengthen their
operations in different ways:
 By establishing a joint venture two or more
companies agree to collaborate and jointly
invest in a separate business project. This type
of deal allows the partners to combine their
strengths in one specific area.
 A merger means that two companies, often in
the same industry, come together to form one
company. Companies merge for many reasons,
for example, to increase market share and cut
costs in certain areas, such as research and
development.
 Acquisition or takeover: one company accumulates
enough of another company’s shares to take over control
and ownership. Takeovers have two forms:
 A friendly takeover consists of a straight buyout of a
company, and happens frequently. The shareholders
receive cash or an agreed-upon number of shares of the
acquiring company’s stock.
 A hostile takeover occurs when a company attempts to
buy another whether the management of the target
company likes it or not. This can usually occur only
through publicly traded shares. This is difficult unless the
shares of the target company are widely available and
easily purchased.
In a joint venture we must take care of
three things:
Business strategy: Begin with a wellarticulated strategy. Determine and explain
why you wish to enter a joint venture (JV) ,
why you have chosen your partners, and
what you hope to achieve. Define
involvement of the parent companies and
how long the JV will last. Consider
outcomes: what could cause you to
terminate the JV, and what is the preferred
exit strategy.
Human resources strategy: Develop a
distinct identity and culture for the new
organisation, communicate with
employees, establish direct career paths,
management and a means of return for
employees transferred to the joint venture.
Mantain open communication between the
HR department of the parents and the joint
venture.
Communication: It should be frequent
and used to create a common vision,
establish a connection with leadership and
explain the new rules. Share as much
information as you can, never sugar-coat
or make false promises.
More on mergers:
 The entire merger process is usually kept secret
from the general public, and often from the
majority of the employees at the involved
companies.
 Since many merger attempts do not succeed,
and most are kept secret, it is difficult to estimate
how many potential mergers occur in a given
year.
 A merger may be sought for a number of
reasons, some of which are beneficial to the
shareholders, some of which are not.
 One use of the merger is to combine a very
profitable company with a losing company in
order to use the losses as a tax write-off.
 Another type of popular merger brings together
two companies that make different, but
complementary, products.
 A merger is usually handeled by an investment
banker, who aids in transferring ownership of the
company through the strategic issuance and
sale of stock.
The merger process will no doubt change
in the near future, as dynamic
technologies allow for the development of
a more streamlined marketplace which
manages to protect the privacy of
interested companies.
Phrasal verbs III
Match the following verbs with the correct
prepositions to form phrasal verbs:
 Catch
 Stand
 Speak
 End
 Get
 Go
 Go
 Look
 Up
 Up
 On
 On
 Down
 Ahead
 By
 Under
Replace the words in italics with a
suitable phrasal verb:
1) The company had hoped that the new
sportswear designs would be a success but in
fact they never really became popular.
2) They finished by having to abandon the idea
altoghther.
3) Following the recent takeover of his company
the chairman hes announced his intention to
resign.
4) I’m afraid I can’t hear what you are saying.
Could you talk louder please?
5) He’s new here, but he seems to be
making progress.
6) Many businesses fail in their first year.
7) We need to think of the future and decide
where we want to be in five years.
8) It’s a pity we let that opportunity pass; we
need more orders like that.