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

Lloyds/HBOS and your Easter essay

We had a superb session from Richard Tolson of Lloyds Banking Group last week. Over Easter you need to write an essay based on the difficulties of integrating businesses successfully. Some ways which you might be able to use the Lloyds' example are shown in the paragraphs below ......

One of the problems of associated with takeovers and mergers is getting businesses with different cultures to work as a harmonious and effective whole, particularly in the short term. For instance, in the case of the “shotgun wedding” of Lloyds and HBOS of 2008, these two companies had very different approaches to risk and lending; with Lloyds being more  cautious in its approach to lending (i.e. lending less in relation to its capital reserves) and HBOS employing a higher risk strategy. Given the size of the new entity and given that Lloyds and HBOS had two very different organisational cultures there were bound to have been some coordination and communication diseconomies of scale in the early phases of integration. These organisational problems often take time to work through and businesses may not have the luxury of several years in which to turn performance around. This clash of cultures as a problem in mergers is also seen in the example of (PROVIDE YOUR OWN EXAMPLE TO COMPARE AND CONTRAST WITH THE LLOYDS EXAMPLE)

Another common problem firms face in implementing the change involved with a merger is in coping with external events. External events can really blow a merger off course and it can be tricky to separate the effects of the merger on a business’s performance from the effects of external events on performance. For instance, the Lloyds HBOS merger in its early days saw Lloyds share price nose-dive at an alarming rate and the government had to bail the new organisation out to the tune of £20 billion (largely as a result of write off of bad loans made by HBOS). Therefore on the face of it the merger appears to have been beset with problems and it will have been difficult for Lloyds to “sell” the merger as a success to its stakeholders. However, how many of these issues were down to the general economic malaise which affected all banks and to what extent they were due to the integration process on Lloyds Banking Group is incredibly hard to disentangle. Another merger where external events appear to have added to the difficulty of integrating businesses is  (AGAIN, PROVIDE YOUR OWN EXAMPLE TO COMPARE AND CONTRAST WITH THE LLOYDS EXAMPLE)

Upgate on IAG/BMI

The UK's Office of Fair Trading (OFT) has decided not to review IAG's deal to buy BMI. The decision on whether to approve the deal will remain with the European Commission.

You can read the full story here:

http://www.bbc.co.uk/news/business-17258825?utm_source=twitterfeed&utm_medium=twitter

Mega mining deal: a marriage made in Heaven?

The proposed merger between Glencore and Xstrata is something we will consider this week in the context of the motives for mergers. If the deal goes through it will create the world's biggest mining company. It would be good if you could read about it in advance: •http://www.bbc.co.uk/news/business-1690781616907816

•http://www.guardian.co.uk/business/2012/feb/07/glencore-xstrata-confirm-90-billion-merger7/glencore-xstrata-confirm-90-billion-merger

British Airways

British Airways provides a great case study for mergers and acquisitions. I reckon it is relevant for these bullet points in particular:-

●the motives for takeovers and mergers and how these link with corporate strategy

● the impact on, and reaction of, stakeholders to takeovers and mergers

● the reasons why governments might support or intervene in takeovers and mergers.

BA merged with Iberia in 2010 (the deal was ratified by shareholders of both companies at the end of the year). Now IAG (the merged BA-Iberia) is seeking to takeover BMI. If this deal goes through it will give the company over 50% of the landing slots at Heathrow; no doubt one of the reasons Sir Richard Branson is pushing the message that this deal will be bad for the customer. The links provide useful background detail on the story and will enable you to build a “wow” example

http://www.bbc.co.uk/news/business-16307572 

http://www.guardian.co.uk/business/2011/dec/22/ba-owner-iag-virgin-buy-bmi

http://www.bbc.co.uk/news/business-11862956

Bullet Points

Here are the 6 bullet points for the research theme. We will need “wow examples” for each of them

Research Theme – Takeovers and Mergers

In your research on takeovers and mergers you should consider:

● the motives for takeovers and mergers and how these link with corporate strategy

● the problems of takeovers and mergers including difficulties integrating businesses successfully

● the factors influencing the success of takeovers and mergers

● the impact of takeovers and mergers on the performance of the businesses involved

● the impact on, and reaction of, stakeholders to takeovers and mergers

● the reasons why governments might support or intervene in takeovers and mergers.

You are strongly recommended to compare and contrast a number of different takeovers and mergers.