ACHIEVING GLOBALISATIONTHROUGH MERGERS AND ACQUISITION BY OTIS FRANCIS SANDRA.C. STROUDOLUKAYODE. A. AFOLAYAN HARUNA HAMISU I.
INTRODUCTION Business driven globalization to some people means, making the world a small business continent. Globalisation in an international Business,is seen as a multi- dimensional process.(Walls. S and Rees.B, 2004
A CRITICAL VIEW•British Telecom and AT&T•Daimler’s outright acquisition of Chrysler•Deutsche Telecom acquired Voice Stream•Biotech-pharmaceutical mergers designed to combine R&Dcapabilities with distribution.•AOL-Time Warner merged into a multimedia powerhouse in2001.(Dante. G, 2006)•Votarantim•PWC•BP merged with Amoco•Starplan acquired Vono•Vodacom merged with Econet wireless.
Reasons for mergersThere are diverse strategic reasons thatprompt organizations to merge.•For larger market share and to gainaccess to each other’s new market.•To share risk and returns: In sharing riskand returns, some organisations want toexpand by going to new countries, butdont want to bear all the loss in case anydo arise.
BENEFITS OF MERGERS•It brings about increased marketshare/coverage.•Synergy. I.e, Preparing a consolidatedProfit and Loss Account/Balance sheet ofthe organisations that merged, therecould be gain on Exchange rateconversion.
REASONS FOR ACQUISITONThe four main strategic intentions in whichcompanies engage in this are:• Integration• Concentration• Diversification• Globalization
TESTING WITH TOOLSThe testing with tools helps to analyze thecompanies that globalize via mergers andacquisitionKEY WORDSA-AcquisitionM-MergerC-Market CompetitionS-SurvivalG-GlobalizationDI–DiversificationDO-Dominance
COMP A M C S G DI DOANYAMOCO NO YES YES NO YES YES NOVOTAR YES NO YES NO YES NO NOANTIMBP YES YES YES NO YES YES YESDAIMLER YES YES YES NO YES YES YESCHRYSLER NO YES YES NO YES YES NOPWC NO YES NO YES YES NO NOSTAR YES NO YES NO YES NO YESPLAN
VONO YES NO YES YES YES NO YESBRITIS YES YES YES NO YES YES YESHTELECOMAT&T NO YES YES NO YES YES NOV YES NO YES NO YES NO YES-MOBILEHP YES YES YES NO YES YES YESCOMPA NO YES YES NO YES YES NOQDISNE YES YES YES NO YES YES YESY NO YES YES NO YES YES NOCAPITALDEUTSC YES YES YES NO YES YES YESHETELECOMVOICE NO YES YES NO YES YES NOSTREAMECONET NO NO YES NO YES NO NOWIRELESS
CONCLUSIONOne of today’s contemporary issues isglobalisation of companies and businessactivities across the continent.Despite thebenefits of mergers/acquisition, mostmergers and acquisition fail.The exercise does not always end ineffective synergy. So where doesglobalization lead us today?