Come on Irene

Superb interview here from 2010 with Irene Rosenfeld, Kraft CEO. She covers the expected synergies of the Cadbury deal (extra $1bn revenue by 2013), how she sees the two companies as "highly complementary", some of the political/media issues in Britain and the closure of the Somerdale factory

The interview can be viewed on youtube here:

http://www.youtube.com/watch?v=aT_5DQIksDo&feature=related

The UK car industry: A case for the benefits of foreign takeovers?

The car industry has so far been a bright spot in the UK economy, with BMW, Toyota & Jaguar Land Rover all announcing plans to increase production at UK plants over the last 12 months. About 1.5m cars will be built in Britain this year, up from 1.4m in 2011 according to the Society of Motor Manufacturers and Traders. This is the fourth consecutive year that there will be an increase in UK car production. The vast majority of these cars will be exported.

It should be considered that all of the UK “top 5” car makers are foreign owned:-

2010 UK top 5 car manufacturers

1 Nissan 423,262

2 Mini 216,302

3 Land Rover 179,165

4 Honda 139,278

5 Toyota 137,054

If a “Cadbury’s Law” had been in place as a barrier to foreign takeovers, would UK car manufacturing be providing as many jobs for British workers?

If you want to read a bit more in support of a view that foreign investment is healthy for the UK economy, there is quite an interesting piece on the BBC site where Jim O’Neill of Goldman Sachs talks about the value of foreign investment in regenerating  Manchester.

http://www.bbc.co.uk/news/business-17269654

In 2010, Mr O'Neill led the so-called “Red Knights” consortium in an unsuccessful attempt to wrest control of Manchester United from its American owners, the Glazer family.

US government blocks mobile merger

Thanks to Jonny Richmond for coming up with a real “wow example” in his essay on government intervention in mergers and takeovers. The example given was of a failed takeover bid from the United States in 2011 where the second largest mobile phone company (AT&T) attempted to takeover the 4^th largest operator (T-mobile USA) in a proposed $39 billion deal. The reasons this deal was eventually dropped was due to government intervention from the U.S. government. The American government actually sued to block AT&T’s acquisition of T-Mobile USA, a deal that would have created the largest carrier in the country. The reason the U.S. government intervened was to protect customers.  James M. Cole, the Deputy Attorney General, said: 

“We believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services”.

This article from the New York Times gives more detail:

http://dealbook.nytimes.com/2011/08/31/u-s-moves-to-block-att-merger-with-t-mobile/

The AT&T/T-mobile USA deal was finally called off in December 2011 with the main reason being the opposition of the U.S. government to the proposed takeover.

Finding "wow examples"

There is a very good section on tutor2u where you can get a list of mergers and acquisitions with associated links to a relevant news article (many of these news items, but not all of them, appear to be BBC articles). This list could be helpful to you when you are looking for one more “wow” example to support your argument in an essay.  

However, remember knowing a few “wow” examples in real depth is far better than having a scattergun and shallow knowledge of dozens of examples. With this in mind, I would particularly recommend that you have a glance at the article on the United Airlines / Continental Airlines merger of 2010 as this supports the work we have done on IAG. Awareness that there is a trend within the airline industry of consolidation is important in any discussion of the various mergers which IAG has been involved in.

Link to airline merger article:

http://www.bbc.co.uk/news/business-11353161

Link to full list of mergers and takeovers:

http://www.tutor2u.net/blog/index.php/business-studies/comments/researchbuster-acquisitions#extended

Victory for Willie Walsh in BMI takeover

European competition authorities have supported IAG’s takeover of BMI, although they have imposed a condition on IAG. This is quite a nice example to bring in to any consideration of bullet point 6 i.e. “the reasons why governments might support or intervene in takeovers and mergers”.

The IAG takeover of BMI has been given the green light so long as IAG relinquish 14 landing slots at Heathrow (but they will still gain 42 extra slots at Heathrow from the merger). Seven of the relinquished Heathrow slots must be sold by IAG to operators providing flights to Edinburgh and Aberdeen (directly addressing Richard Branson’s complaint of a worsening of service to Scotland as a result of the merger). 

In terms of employee impact (a key stakeholder) it looks like many BMI staff will be jobless.

Clearly Willie Walsh and Richard Branson aren’t the best of mates! You can read about it in more detail here:-

http://www.guardian.co.uk/business/2012/mar/30/iag-ba-takeover-bmi-branson