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SMMC_G5__[CS-2], Acquisitions, G5 Group member, Three-Part test, A…

- - - - Develop new capabilities
        
        Salesforce's acquisition of Tableau
    - - Applying own capabilities
        
        Amazon's purchase of Whole Foods
  - - - They identify targets that might be undervalued by the market
      - They have a thesis about how the target firm's value can be improved.
  - - - the post-merger challenges associated
        
        Weak integration plan
        
        Taking on too much debt or risk
        
        Poor evaluation & weak due diligence
        
        Integration difficulties
  - - - Combining two companies ；Friendly approach；Similar size
        
        Broadcom made $117 billion unsolicited offer to buy US tech company Qualcomm
    - - Purchase or takeover；Be friendly or unfriendly；Hostile takeover
    - - Stock price
        
        Short run：neutral,on average
        
        Long run：significant decline,on average
  - - - Cisco is good at identifying targets, buying them at a relatively low premium and then integrating them and creating value from them.
    - - To increase diversification and reduce the overall
        risk for their company.
    - - Salesforce paid for access to
        Tableau's data analytics and visualization technologies and products.
    - - a number of the top Chrysler managers did really well with stock options granted to them as part of the Daimler Chrysler merger.
    - - They may just be super confident that an M&A is the right thing, and it'll help them enlarged their corporate empire.
  - - - absolute secrecy
      - penalty if
        company decided to take an offer from another company.
- - - - Strategic alliance where at least one firm invests in the other
    - - Long-term contract for services or products from another company
    - - Creates a separate third firm
        
        Co-own and also contribute resources to
    - - Contractual arrangement for access to technology typically in exchange for royalties
  - - - Help all participants advance their strategic goals
      - Create value
      - Reduce conflict
      - Contribute valuable assets to the alliance
      - Accept a fair distribution of benefits
    - - Contractual terms
        
        No need to adjust or work around things
      - Credible commitments
        
        Ensure that the other side will behave in the expected way, even if circumstances change.
    - - Need to reevaluate if the alliance still provide strategic overlap
      - If partner still contributes valuable resources that company need
- - - - Making of animated movies
    - - Development of dairy products (5 Years)
    - - Mobile payment experience📱
  - - - Pixar
        
        To help disney making animated movies
      - BAMTech
        
        To help lay out the framework for their upcoming streaming platforms.
    - - Marvel
        
        Avengers
      - Lucasfilm
        
        Starwars
      - 21st Century Fox
        
        Preparation for the launch of Disney+
- - - - The business unit is separated completely from the parent company and its shares are distributed to the parent shareholders
      - Similar to split - off
        
        But the parent shareholders are given the option to exchange their shares for that of the unit
    - - Parent sells part of its ownership in a unit for cash
      - Parent typically retains control
    - - Business unit is simply sold to another firm, usually for a cash compensation
      - Due to small-sized and high-speed, unit sales are by far the most common divestiture mode used
      - Why divest a business unit
        
        Reduce the risk or liability associated with the businesses being divested
        
        A lack of strategic fit with the company's other businesses（low synergies）
        
        Free up and redeploy resources / capabilities
        
        Free up the entrepreneurial or innovative potential within a unit
        
        Get rid of low profitability units so that they can focus their attention in corporate resources
        
        Raise cash for parent
- - - - A strong, credible, post-merger plan