Please enable JavaScript.

Coggle requires JavaScript to display documents.

Corporate Transactions, Group 3, M&As, Divestitures, Technology…

- - - - One or both firms take an equity stake in the other by contractual terms or credible commitments
        
        1.Access capabilities or markets more quickly.
    - - A separate third firm that both alliance partners co-own
    - - For services or products from another company
- - - - largest units
        
        2.shares are distributed to the parent shareholders
        
        create the most value
        
        represent the largest transactions
        
        set the unit free
        
        1.the business unit is separated completely from the parent company
      - split-off
        
        given the option to exchange their shares for that of the unit.
    - - the fastest to execute
        
        smaller units
        
        the business unit is simply sold to another firm
        
        cash compensation
    - - carve-out
        
        IPO involved
        
        the parent still retains more than 50 percent ownership → effective control
        
        the way, which the parent is still typically controlling the majority of the shares
        
        the parent sells part of its ownership in a unit for cash
  - - - raise cash
    - - 1.open to divesting their units
        
        2.managers need to be clear about the goals of any divestiture.
  - - - inventor of the graphical user interface, GUI
        
        the way we interact with computing devices, by using a mouse or a touchscreen.
        
        combine the GUI with the mouse
        
        create the Alto in 1973
      - Why do most people know nothing about the achievements of Xerox PARC?
        
        Never successfully commercialized most of these innovations.
  - - - be entrepreneurial and innovative
  - - - e.g. it's important for the new unit to find its own identity and to define its own culture, to set itself apart from the parent after the divestiture.
- - - - Broadcom
        
        Singapore based Broadcom made $117 billion unsolicited offer to buy US tech company Qualcomm
      - Amazon Whole Foods
        
        Where Whole Foods approached Amazon based on some previous interests that Amazon had expressed in Whole Foods
  - - - Synergies
        
        combination of the two companies's capabilities, can create more value than the sum of them acting alone.
        
        create acquisition premium.
    - - stretching strategy:helping the acquirer develop new capabilities
      - leveraging strategy:applying the acquirer's capabilities to the target's business
        
        The value created
        stretching < leveraging
        on average
    - - ensure the target is not impaired
    - - leveraging strategy
        
        leveraging its capability to improve management and thus to create value from the target
    - - overpaying for targets
        
        failure on post-merger integration
        
        the integration activities need to follow that values statement thesis and become an integration thesis
      - employee resignation
      - inadequate evaluation
      - Growth and diversification are too fast, and profits begin to decline
    - - avoid a deal making mentality
      - focus on evaluating the target, ensuring synergies exist
      - three-part test
        
        does the M&A have the potential for creating synergies
        
        why the alternative such as an alliance, cannot achieve the same or similar synergies
        
        whether this potential synergy can be at least partly captured
      - well-managed M&As
        
        clear identification and quantification of the types of synergies
        
        objectivity in evaluating
        
        financial slack
  - - - Short-run
        
        positive, negative, neutral
      - Long-run
        
        significant declines
      - Why company do M&As?
        
        Good reason
        
        Access new markets, technology, etc.
        
        Superior acquisition& integration capability
        
        Overcome competitive disadvantages
        
        Bad reason
        
        Managers are doing M&As not necessarily in the best interests of the company or its shareholders, but in their own personal interest
        
        Managerial hubris
        
        The efficient market wall
        
        Investors and other acquirers impute the value of targets, which is reflected in the targets' market value(stock price)
        
        Winner's curse
        
        In a competitive bidding war(auction), the acquirer has to be the highest bidder to get the target
- - - - put quantification around it for customers.
  - - - give them tool、data and time to internalize the reason
  - - - give people systematic way to think about where value comes from different context.
  - - - let people excited
    - - a way that is accessible to all kinds of learner (ex:PPT)
      - sure volume: dramatically outside of normal
  - - - company exist to create value proposition, but no tool have existed to prior the elements.
        
        found 30 elements( through thousands of anaylsis are all asking same questions.)
  - - - put 80% of energy on that 20% that's going to do
    - - get better acquisition ideas
- - - - M&As often destroy value;apply three-part test for value-creation M&As.
      - Divestitures ans alliances create value if managed well.
      - Corporate transactions are a critical dimension of corporate strategy.
- - - - Management team from the company
      - Private equity fund that's making the investment
      - Investment bank who's representing the company for sale
    - - Coming from insurance companies
      - Coming from pension funds