...Case 11 After Heinz and Dell, a Merger Boom Fails to Appear By David Welch, Aaron Kirchfeld, and Matthew Monks on March 28, 2013 http://www.businessweek.com/articles/2013-03-28/after-heinz-and-dell-a-merger-boom-fails-to-appear [pic] Photograph by Anthony Bradshaw Two big deals announced in February—Berkshire Hathaway’s (BRK/A) $23 billion takeover of Heinz and the proposed $24.4 billion buyout of Dell (DELL)—prompted speculation that a new wave of megamergers and buyouts was finally under way after a five-year drought. What’s happened since? Very little. The value of announced global mergers in March was about $100 billion through the 27th, on track for the lowest monthly total since July 2009. Some on Wall Street say the Heinz and Dell deals were special situations that didn’t signal the start of a trend. Warren Buffett strikes when he sees an opportunity, and he can go for long stretches without making a major purchase. With Dell, the bidding was initiated by the company’s founder, who still controls 15.6 percent of the shares. Dell has also gotten bids from Blackstone Group (BX) and Carl Icahn. The two deals “may be unique to this quarter,” says Michael Carr, head of mergers and acquisitions for the Americas at Goldman Sachs (GS). At other companies, concern about U.S. government spending cuts, leadership changes in China, and persistent sovereign debt problems in Europe are weighing on executive confidence and inhibiting deals, according to Mark Shafir, co-head of global...
Words: 786 - Pages: 4
...Reviving and even Invention Tradition was a major aspect of Irish Nationalism What we know of history is only what we are told and shown. The idea of reviving and inventing tradition in Ireland shows us how history can be manipulated by its tellers in order to suit their cause. Inventing tradition as described by Eric Hobsbawm is ‘A set of practices, normally governed by overtly or tacitly accepted rules and of a ritual or symbolic nature which seek to inculcate certain values and norms of behaviour by repetition, which automatically implies continuity with the past’ – Hobsbawm, Reading 5.1 p176, Tradition and Dissent. It also includes preserving or showing only specific aspects of a history that align with the individual or groups specific cause and encourages specific beliefs about the past that it wants people to have. The British conquest of Ireland was a gradual process which began in 1169, and by 1603 the whole of Ireland was under British rule. It was the belief of the Irish nationalists that Ireland should rule itself. After many years the Irish nationalists won independence from Britain in 1922. Reviving and Inventing tradition was important both prior to gaining this independence, and after gaining independence. Throughout the century prior to Ireland gaining its independence the nationalists were united in the goal to establish that the country of Ireland had a rich and ancient culture. Thomas Davis was an Irish Nationalist who lived from 1814 until 1845...
Words: 1145 - Pages: 5
...Cognitive Dissonance PSY/400 Cognitive Dissonance What is doing the right thing? Is doing the right thing always going to be the right thing to do ? Are there limits on doing what is right? Are there exceptions on what is right? When looking at cognitive dissonance, one has to understand what cognitive dissonance is. Cognitive dissonance is the feeling of when a person holds two conflicting thoughts in their mind at the same time. According to ITS psychology dictionary, Cognitive dissonance is define as, “a state of tension created when there are conflicts between an individual's behavior and beliefs, or between two beliefs.” (ITS Tutorial School, 2005) In this paper, the reader will look at a situation, and will automatically be able to see cognitive dissonance. We will then analyze the social, cultural, and spiritual influences on the individual’s behavior and his or her ethics. Describe the reciprocal relationship between behavior and attitudes, and explain how the individual could have used cognitive dissonance theory to rationalize his or her behavior. The Situation A man, Bob, meets a girl, Sarah, and starts to get to know her. Bob and Sarah start to click, then decide to take their relationship to another level. Bob and Sarah made the decision to become a couple and even talk about marriage. The relationship becomes serious but is still extremely new. Bob and Sarah really did not give each other a chance to get to know each other and start...
Words: 1989 - Pages: 8
...GLOBAL ROLL OUT: A CASE STUDY OF PT. XYZ INDONESIA REBRANDING PROGRAM In February 2007, XYZ - a North American mining corporation, acquired 100% share ownership of ABC Limited, one of the largest nickel mining and processing companies in the world. PT. ABC Indonesia, which was 60% owned by ABC Limited, was inevitably also affected by the acquisition process. The news about the acquisition was immediately spread among the employees and concerns about the possible changes in the company arose immediately. Six months after the acquisition, XYZ sent some senior officers to Indonesia to assess the possibility of rolling out a rebranding program in Indonesia which covered the implementation of a new corporate vision, mission and values, implementation of key global policies and lastly the change the company name from PT. ABC Indonesia into PT. XYZ Indonesia. The visit instantly triggered a strong reaction from the labor Union and employees. They filed a protest arguing that they should have been involved in the discussion about potential changes which would have significant impacts for the employees. In addition to that, they also demanded a good-will payment from the new owner. The Union threatened to call a strike if their demands were not met. After several meetings with representatives of Union, agreement could not be reached. Nearly 1200 employees, roughly one-third of the company workforce, went on a strike for 11 days and caused the loss of approximately US$10 million. Fearing...
Words: 2160 - Pages: 9
...|Merger and Acquisition | INDEX |S.NO |Contents |Page No. | |1 |Abstract |3 | |2 |Introduction |4 | |3 |Types of Mergers |4 | |4 |Reasons for Mergers and Acquisition |5 | |5 |Advantages of Mergers and Acquisition |7 | |6 |Failure of Mergers and Acquisition |10 | |7 | Making it Happen |13 | |8 |Conclusion |14 | |9 |Bibliography |15 | Abstract: As a corporate strategy, Mergers and Acquisition have been used to expand size and growth of business. In this report this corporate strategy is investigated...
Words: 3833 - Pages: 16
...Merger Memo JaDarius Stewart HCS/514 February 10, 2014 Michael Curtis Merger Memo Introduction In this memo will discuss the importance of communication within the company, and the impact of organizational culture on products and services. We will also talk about organizational behavior and how it affects quality, competition, and human relations. We are also going to learn how job design, work processes, and performance expectations can affect organizational outcomes. The Importance of Communication In order for our company to succeed in this merger, the key factor is going to be communication. Communication must take place at all levels of the spectrum within our organization. We must embrace change and it will be brought about through communication. We build the success of our organization by exchanging our ideas, thoughts and emotions. Each employee’s has a wealth of information, and we encourage our employees to participate in sharing their thoughts and ideas. There may be times where we will encounter conflict, but with good communication we will get through our conflicts. This organization considers your ideas and opinions important and we will arrive at an agreed-upon meaning. As an employee, what you have to say whether it is an opinion, a decision or a course of action – it matters to this organization. Staff meetings will be observed in an effort to improve communication within all areas of our organization. Staff meetings can be information...
Words: 1600 - Pages: 7
...TABLE OF CONTENTS EXECUTIVE SUMMARY 3 MERGERS & ACQUISITIONS 4 DISTINCTION BETWEEN MERGERS AND ACQUISITIONS 5 TYPES OF MERGERS AND ACQUISITONS 7 Horizontal Merger 7 Vertical Merger 7 Co-Generic Merger 7 Conglomerate Merger 7 RECENT EXAMPLES 8 REASONS FOR MERGERS AND ACQUISITIONS 10 Growth of the company 10 Synergy 10 Diversification and expansion 11 Elimination of competition 11 × REASONS WHY MERGERS AND ACQUISITONS CAN FAIL 12 No common vision 12 Weak leadership and poor governance 12 Poor strategic fit 12 Cultural and Social Differences 13 Incomplete and Inadequate Due Diligence 13 Poorly Managed Integration 13 Overpaying the target company 13 Changing market condition 13 ARTICLE STATING REALITIES OF M&A for HR 14 SUCCESS MANTRA for M & As 15 Cultural integration 15 Change Management 16 Management resources 16 Role of HR in M&A’s 18 Three Stage Model of Mergers and Acquisitions 21 Stage 1-Pre-Combination (HR Issues): 21 Stage 2-Combination and Integration (HR Issues): 22 Stage 3: Solidification and Assessment (HR Issues): 22 Role of the HR Department in M&A Activity 23 INDUSTRY EXAMPLE – Schnieder 26 Challenges due to acquisitions 26 Industry Example – MTS 29 Conclusions 30 At the Company Level 30 At the HR Level 31 REFERENCES 33 EXECUTIVE SUMMARY Mergers and acquisitions, as a means of rejuvenating and restoring business, have become increasingly popular...
Words: 7368 - Pages: 30
...acquiring. Identify key intangible assets and make plans to retain them early. As soon as practical, analyze the target company to identify key managers, specialists and knowledge owners. Who owns the customer relationships, which provides the headship to the team? These are key people who need to be engaged early to ensure their retention. What other unknown talent high potential individuals and teams – exist who will provide new value within the merged business? In a ‘friendly’ merger, gain access to and assess the key people before closing. Discuss any issues you would likely encounter if you were to merge the PTO system to a traditional leave system. Explain which issues would be difficult to solve and why. An helpful way for company growth is to combine with an already established player on the market. However, two out of three mergers fail to become successful. In a merger, great difficulties could occur which prevents the initial purpose of the merger to be achieved. The success of a merger is highly...
Words: 1037 - Pages: 5
...Introduction Mergers and acquisition (M&A) varies from country to country. Some countries have laws regulating M&A while others don’t. M&A basically is a combination of two or more businesses into one new business. What defines the merger or acquisition is how the combination is brought about. Mergers are usually negotiated between parties before the combination occurs while acquisition does not necessarily have to go through negotiations between parties. Mergers and Acquisition can succeed or fail base on a number of factors. This paper will examine the concept of mergers and acquisition, why M&A fail and possible recommendations Input Businesses sometimes merge or acquire to improve on their competitiveness and to meet their strategic objectives. Mergers and acquisition can come about because of stiff competition in the market or to create economies of scale or to enter new markets, or to diversify or a combination of many factors as mentioned in this sentence. Sometimes the only reason an acquire may purchase a business is for speculative profits, in that the sole purpose is to purchase with the intention to split them into smaller pieces and selling them or parts thereof for a price which is much higher than the acquiring price. Mergers and acquisition can also come about because of management failures. This situation can come about because management was unable to move the company in a positive direction which would have maximize shareholders wealth. Some of...
Words: 2142 - Pages: 9
...regional carriers. The company is privately held. The analysis of this organization includes expansion options of an Initial Public Offering, acquiring an organization in the same industry, and merging with another organization. The positive and negative aspects of each option above are reviewed and a conclusion will be drawn as to the next step for that business to take. Virtual Organization Strategy Paper The concept of business expansion offers both promise and peril. The desire of growth for a business must be tempered with the fact of additional uncertainty and risk. Business under normal operating circumstances is perilous. The additional layering of risk in any type of expansion or capital generation cannot only serve to fail in its objective, but also has the possibility to bring the organization to financial ruin. An effective executive must weigh the chance of success with the absolute possibility of failure. Going Public through an IPO An option for Huffman Trucking to consider for expansion of its operations is going public through an initial public offering, or IPO. Offering a distribution of Huffman’s shares to the public will help the company acquire new capital for reinvesting back into the company, and allow a return to the public capital market again and again with ease. According to a memo from Huffman Trucking Chief Executive Officer and President Kristen Huffman, the company is planning a new direction because of...
Words: 1782 - Pages: 8
...Executive Summary The reason behind mergers and acquisitions is to create more value as two organisations put together would be more valuable than two separate organisations whereas the basic theory behind buying an organisation is to build shareholder value over and above of the sum of the two organisations. Mergers and acquisitions have become a regular occurrence of growth for organisations in the recent years. Organisations are presented with likely wider market share as well as open to a more diversified market. Mergers has most times been seen to be profitable both competition and consumers by allowing companies to run more successfully. It may occasionally lead to decrease competition in some ways and highly complicated as can be seen in today's world. There are laws governing mergers and acquisitions in the UK which is covered in the city Code on Takeovers and Mergers which is created to ensure that shareholders are cared for and not denied the privilege to decide on the value of a takeover and that shareholders of the same standard are afforded equal rights by an offeror. CSR is the process of evaluating a company's impact on the society and assessing their responsibilities. It defines areas of concern and initiatives to better relations with the people as well as the environments affected by business functions. Shell Plc certainly needs to do more to improve the quality of life in the society in which they operate as well as the environment where they...
Words: 2335 - Pages: 10
... | |Mergers & Acquisitions: An Introduction | |Prof. Ian Giddy, New York University | |[pic] | | | |INTRODUCTION | |This is an introduction to the subject of mergers, acquisitions, buyouts and divestitures as covered in my Mergers & Acquisitions course. The purpose is to delineate how and why a merger | |decision should be made. The course focuses on mergers and acquisitions in the context of private as well as publicly traded companies. Acquisitions of private companies account for the | |majority of transactions. To properly assess a potential merger we need to perform fundamental strategic and financial...
Words: 5304 - Pages: 22
...CURRENT ISSUES SERIES Mergers & Acquisitions: Organizational Culture & HR Issues Deborah A. Pikula IRC Press Industrial Relations Centre Queen’s University Kingston, ON K7L 3N6 Tel: (613) 533-6709 Fax: (613) 533-6812 E-mail: ircpress@post.queensu.ca Visit our Website at: http://qsilver.queensu.ca/irl/qsirc/ Queen’s University ISBN: 0-88886-516-3 © 1999, Industrial Relations Centre Printed and bound in Canada Industrial Relations Centre Queen’s University Kingston, Ontario Canada K7L 3N6 Publications’ Orders: 613 533-6709 Canadian Cataloguing in Publication Data Pikula, Deborah A. Mergers & acquisitions : organizational culture & HR issues (Current issues series) Includes bibliographical references. ISBN 0-88886-516-3 1. Personnel management. 2. Corporate culture. 3. Organizational change. 4. Consolidation and merger of corporations. I. Title. II. Series: Current issues series (Kingston, Ont.). HF5549.P469 1999 658.3 C99-932294-X Executive Summary Mergers and acquisitions are increasing in North America as organizations try to expand their operations and increase their competitive advantage. But despite optimistic expectations, mergers and acquisitions frequently fail, in part because managers neglect human resource issues, which are rarely considered until serious problems arise. This study highlights the importance of proactive management of human resource issues, concurrently with financial issues, and offers detailed practical advice to help ensure...
Words: 7237 - Pages: 29
...MERGERS & ACQUISITIONS WITH RESPECT TO ORGANIZATIONAL CULTURE INTRODUCTION 1. Mergers and acquisitions have often come in waves of activity that were motivated by different factors. Further 1890 to 1905, more than 200 mergers of major importance occurred as many small companies in the same industries merged to form monopolistic entities. After 1905, merger activity was particularly heavy during the 1920s as small companies in similar industries continued to merge to gain market power. According sources, the capacity of merger activity was also heavy after World War II as large companies completed friendly acquisitions of small privately held companies. Another large wave of mergers occurred in the 1960s and 1970s, motivated largely by the quest for risk reduction through diversification. 2. Investopedia explains “Mergers and Acquisitions – M & A” as general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed (investopedia.com, 2013). 3. M & A and corporate restructuring are a vital part of the corporate financial world. According to Ben McClure everyday Wall Street investment bankers arrange M & A transactions, which bring separate companies together to transform into large ones. 4. Furthermore describing on Mergers and Acquisitions, two terms separately. Mergers: two similar-sized firms are combined –...
Words: 2078 - Pages: 9
...Mergers, Change and Culture Clashes Which is more important, being able to work together or liking each other? It is actually both! Organizations must perform due diligence before merging in order to ensure that their two cultures are amenable to working together. It has been stated by OB researchers that an organizations culture is founded by the leader (Robbins and Judge, 2008, p. 253); however, there are sub-cultures within the main culture which are totally employee based, and these cultures must mesh with the newly merged organization. Just as two individuals with differing values and beliefs will not co-exist for long, unsuitable organizational marriages won't last either. According to an article by Lobsenz & Summers, ways in which organizations can assess some of the potential stumbling blocks is by conducting a cultural audit. Team C believes that the culture of an organization must be aligned with the culture of the newly merged organization. There will be some differences; however, but we feel that if the merger is openly and honestly discussed with the employees of both companies, and the employees are given some participation in the process, and that there is two way communication, that the culture of both organizations will also merge and make for a smoother transition. As with any change that creates uncertainty, leaders and managers can help employees deal with the change constructively. Without communication, participation, and preparation, a merger can be a...
Words: 630 - Pages: 3
