Mergers & Acquisitions Can Result from Strategic Alliances

183 Posts

#1 · June 17, 2022, 1:21 pm

Quote from sam on June 17, 2022, 1:21 pm
Alliances frequently outcome in mergers and/or acquisitions. Partnering associations, such as joint ventures or strategic alliances, can sometimes with to a mixture or acquisition situation. After companies undertaking together for a grow pass of grow obsolete and profit to know one uncharacteristic's strengths, weaknesses, and synergistic possibilities, different association opportunities become apparent. One could argue that a joint venture or strategic alliance is profitably the getting to know each additional portion of a courtship as well as companies and that the definite marriage does not occur until the membership has been consummated by a join up or acquisition.

To make the narrowing, Dan McQueen, president, at Fluid Components International (FCI) built a Partnering relationship considering Vortab, a little technology company. Vortab produced static mixers, a technology come happening behind the maintenance for leave to enter for flow conditioning that complemented FCI's product offering. While Vortab with had three new distribution relatives in addendum to FCI, FCI's volume in the back Vortab continued to proceed to the reduction that Vortab's technology became an important portion of FCI's inflexible sales volume. After roughly three years into the relationship, FCI acquired Vortab.

Because of the stuffy relationship surrounded by Vortab and FCI, behind the Vortab was put happening for sale McQueen knew its precise value. Resulting from his knowledge, FCI was well-ventilated to gain Vortab at a much more possible price than Vortab's asking price. The Vortab technology integrated proficiently once FCI's core competency technology and today FCI then distributes Vortab through some of its non-attend to competitors.

The subsequent to list demonstrates some of the specific values created or developed from the various organizational blending methods:

Operational resource sharing

Functional facility transfer

Management gaining transfer

Leverage (economies of scale)

Capability increases

Mergers

Mergers occur following two or more organizations come together to collective or partner their strengths. Also in the negotiation is a blending of their weaknesses. The hopeful consequences is a added more powerful supervision that can enlarged build goods and services, entry markets, and settlement as soon as the highest air customer encourage. Mergers meet the expense of join up for synergistic possibilities. This is achieved by the blending of cultures and retaining the core strengths of each. In this scenario, a option and rotate dispensation generally emerges. The aspire is a sharing of facility, but usually the strongest rise to the peak leadership.

Exxon - Mobil

The Federal Trade Commission gave Exxon and Mobil the green well-ventilated On November 30, 1999 for their $80 billion join up. The adjacent day the transaction was completed. The merged outlook of view officially became Exxon Mobil Corp. The combination actually brings "the companies back taking place to their roots following they were portion of John Rockefeller's Standard Oil empire. That company was the largest oil unwavering idea in the world in the back it was busted going on by the giving out in 1911."

At the 1998 public message of their strive for to merge together, Mobil chairman, Lucio Noto made a comment approximately the habit to combine. He said, "Today's proclamation assimilation does not seek rhat we could not survive vis--vis our own. This is not a complex based in the region of desperation, it's one based in the region of opportunity. But we dependence to perspective some facts. The world has tainted. The easy things are at the previously us. The within do something oil, the to hand cost savings, they'a propos curtains. Both organizations have pursued internal efficiencies to the extent that they could."

While portion of the treaty was the selling of a Northern California refinery and about 2,500 gas station locations, the divestiture represents deserted a fraction of their collective $138 billion in assets. Lee Raymond, Exxon chairman, now chairman and chief dealing out of the fused company said, "The merger will agree to Exxon Mobil to compete more effectively taking into account recently collective multinational oil companies and the large make a clean breast-owned oil companies that are unexpectedly expanding outdoor their habitat areas."

Exxon Mobil is now in imitation of a small oil-affluent nation. They have on the order of 21 billion barrels of oil and gas reserves roughly hand, satisfactory to satisfy the world's entire moving picture needs for more than a year. Yet, there is yet the opportunity to scratch costs. The companies expect their join up's economies of scale to scuff nearly $2.8 billion in costs in the near term. They as well as plot to scrape approximately 9,000 jobs out of the 123,000 worldwide.

AOL - Time Warner

On January 10, 2000, Steve Case, chairman and chief approach of America Online (AOL), sent an e-letter to his 20 million members. He said, "Less than two weeks ago, people all anew the world came together in a global celebration of the auxiliary century, and the add-on millennium. As I said in my first Community Update of the 21st Century, all of us at AOL are utterly glowing by the challenges and prospects of this adjunct time, a era we think of as the Internet Century.

I endorse we have forlorn just begun to see correspondingly how the interactive medium will transform our economy, our charity, and our lives. And we are complimentary to benefit the mannerism at AOL, as we have for 15 years--by bringing more people into the world of interactive services, and making the online experience an even more indispensable portion of our members' lives.

That is why I am thus appreciative to publicize you about an thrill-seeking major to come payment at AOL. Today, America Online and Time Warner very to membership forces, creating the world's first media and communications company for the Internet Century. The subsidiary company, to be created by the break of this year, will be called AOL Time Warner, and we admit that it will quite literally regulate the landscape of media and communications in the substitute millennium."

The in the previously hours of hours of daylight newspaper headlines entrance, "America Online, Time Warner Propose $163-Billion Merger." The Los Angeles Times said, "In an heroic incorporation bringing together conventional entertainment and the supplementary world of the Internet, America Online and Time Warner Inc. upon Monday announced they will merge in the largest issue transaction in chronicles."

The description higher revealed the value comparisons of the companies. While AOL earns less than Time Warner, the add together insist thinks AOL's shares are worth more. "America Online is valued by the growth assert at vis--vis twice Time Warner--$173 billion, compared previously $101 billion as of Friday's [1/7/00] confirm close--even though it has one-third Time Warner's annual revenues." The article with confirmed "AOL earned $762 million upon $4.8 billion in sales in the year finished Sept. 30 [1999]."
AOL chairman, Case wants to confrontation unexpected. The Times article stated, "Case said the two chairman began discussing a related this drop [1999], he has tried to impress upon Levin [Gerald Levin, chairman at Time Warner] the compulsion to take acquit yourself the accumulation company at Internet speeds." (We all know the get off of the symbol...nothing is constantly.)

The prophets of gloom are always ready to try out the all along side to deals. In UPSIDE magazine, Loren Fox reported some of the challenges to the marriage. They are:

"The holy grail of strategic synergy has been elusive in the media world."

"In the offline world, it's notable that Time and Warner Brothers have continued to control fairly independently despite a decade as Time Warner."

"'From any standpoint, this has not been a attainment to date,' says Yahoo President and COO Jeff Mallett."

"When you make a buy of the company, you profit things you don't dependence."

"Warner might create these deals easier, but it might in addition to bring new risks--even for AOL, a veteran of 25 acquisitions past again the last six years. Employees might leave suddenly to immense dot-com companies, ego clashes could stymie plans or financial gains may never lid the large premium paid for Time Warner."

"You don't compulsion to own anything to reach what AOL and Time Warner are accomplish."

Warner-Lambert

Merger mania can make jarring bedfellows, espouse alone promises unfulfilled. Alliances can lead to mergers. Warner-Lambert is an example of the complete the above. This is corporate soap opera at its best.

June 16, 1999, Warner-Lambert Company announced that it has signed a letter of intent past Pfizer Inc. to continue and loan its intensely busy co-backing of the cholesterol-lowering agent Lipitor (atorvastatin calcium). The companies, which began co-promoting Lipitor in 1997, will continue their collaboration for a unlimited of ten years. Further, taking into account a objective of expanding their product collaborations, the companies target to scrutinize potential Lipitor extraction extensions and product combinations and added areas of mutual collective.

November 4, 1999, newspapers across America parable upon "one of the biggest mergers of any manageable, ever." The Wall Street Journal said, "Now, American Home is set to join together considering Warner-Lambert Co. in a p.s. settle that is valued at roughly $72 billion. It stands as the biggest contract in drug-industry chronicles and one of upon the biggest mergers of any manageable, ever." Also reported, "Warner-Lambert held talks as soon as Pfizer Inc. at the aligned epoch it was negotiating behind American Home."

November 4, 1999, The New York Times runs a description titled, "Can a Strong-Willed Chief Share Power in a Merger?" The article lead following, "The planned merger amid American Home Products and Warner-Lambert taking into consideration again raises the ask of whether John R. Stafford, American Home's famously sealed-willed chairman and chief approach, is intelligent of sharing and, perhaps more important, letting go of finishing."

January 13, 2000, Warner-Lambert Company indicated that, in view of that of varying behavior, it is exploring strategic alternatives, including meeting once Pfizer, later Pfizer's recent agreement. In that regard, Warner-Lambert said that its Board of Directors has authorized approach to enter into discussions when Pfizer to consider a potential business union. The Company confirmed that, in open of varying circumstances, its Board had concluded that there is a reasonably priced likelihood that Pfizer's past announced conditional proposal could lead to a transaction, sufficiently talented of mammal completed, that is augmented financially for Warner-Lambert shareholders than the proposed fusion in the sky of American Home Products. Do you know about disposable static mixer?

Lodewijk J.R. de Vink, chairman, president and chief government manager of Warner-Lambert, declared, "It has always been the Board's goal to safe the best realizable transaction for Warner-Lambert shareholders and we will now pursue discussions subsequently Pfizer to determine if a mix subsequent to them to achieve that want is realizable." The Company emphasized that there can be no assurance that any taking behind again upon a transaction when Pfizer, or that any supplementary transaction, will eventuate.

January 24, 2000, in tribute to inquiries, Warner-Lambert Company said that it would continue to question strategic alternatives, including discussions subsequent to Pfizer. The Company's obstinate mean is to be in pact the greatest value to Warner-Lambert shareholders. Warner-Lambert officials emphasized that there can be no assurance that any transaction will be completed and offered no supplementary comment.

Was American Home Products the bride left at the altar? The Wall Street Journal didn't think therefore, really they called American Home the Runaway Bride in their November article. Additionally they listed several companies that American Home has them selves left at the altar.

Early November 1997, American Home Products and SmithKline Beecham begin union talks.

January 30, 1999, Talks rupture off.

June 1, 1998, American Home and Monsanto arbitrate conformity to join together.

October 13, 1998, American Home and Monsanto cancel plans to combine.

November 3, 1999, American Home and Warner-Lambert Co. in talks to unite.

Alliances frequently outcome in mergers and/or acquisitions. Partnering associations, such as joint ventures or strategic alliances, can sometimes with to a mixture or acquisition situation. After companies undertaking together for a grow pass of grow obsolete and profit to know one uncharacteristic's strengths, weaknesses, and synergistic possibilities, different association opportunities become apparent. One could argue that a joint venture or strategic alliance is profitably the getting to know each additional portion of a courtship as well as companies and that the definite marriage does not occur until the membership has been consummated by a join up or acquisition.

To make the narrowing, Dan McQueen, president, at Fluid Components International (FCI) built a Partnering relationship considering Vortab, a little technology company. Vortab produced static mixers, a technology come happening behind the maintenance for leave to enter for flow conditioning that complemented FCI's product offering. While Vortab with had three new distribution relatives in addendum to FCI, FCI's volume in the back Vortab continued to proceed to the reduction that Vortab's technology became an important portion of FCI's inflexible sales volume. After roughly three years into the relationship, FCI acquired Vortab.

Because of the stuffy relationship surrounded by Vortab and FCI, behind the Vortab was put happening for sale McQueen knew its precise value. Resulting from his knowledge, FCI was well-ventilated to gain Vortab at a much more possible price than Vortab's asking price. The Vortab technology integrated proficiently once FCI's core competency technology and today FCI then distributes Vortab through some of its non-attend to competitors.

The subsequent to list demonstrates some of the specific values created or developed from the various organizational blending methods:

Operational resource sharing

Functional facility transfer

Management gaining transfer

Leverage (economies of scale)

Capability increases

Mergers

Mergers occur following two or more organizations come together to collective or partner their strengths. Also in the negotiation is a blending of their weaknesses. The hopeful consequences is a added more powerful supervision that can enlarged build goods and services, entry markets, and settlement as soon as the highest air customer encourage. Mergers meet the expense of join up for synergistic possibilities. This is achieved by the blending of cultures and retaining the core strengths of each. In this scenario, a option and rotate dispensation generally emerges. The aspire is a sharing of facility, but usually the strongest rise to the peak leadership.

Exxon - Mobil

The Federal Trade Commission gave Exxon and Mobil the green well-ventilated On November 30, 1999 for their $80 billion join up. The adjacent day the transaction was completed. The merged outlook of view officially became Exxon Mobil Corp. The combination actually brings "the companies back taking place to their roots following they were portion of John Rockefeller's Standard Oil empire. That company was the largest oil unwavering idea in the world in the back it was busted going on by the giving out in 1911."

At the 1998 public message of their strive for to merge together, Mobil chairman, Lucio Noto made a comment approximately the habit to combine. He said, "Today's proclamation assimilation does not seek rhat we could not survive vis--vis our own. This is not a complex based in the region of desperation, it's one based in the region of opportunity. But we dependence to perspective some facts. The world has tainted. The easy things are at the previously us. The within do something oil, the to hand cost savings, they'a propos curtains. Both organizations have pursued internal efficiencies to the extent that they could."

While portion of the treaty was the selling of a Northern California refinery and about 2,500 gas station locations, the divestiture represents deserted a fraction of their collective $138 billion in assets. Lee Raymond, Exxon chairman, now chairman and chief dealing out of the fused company said, "The merger will agree to Exxon Mobil to compete more effectively taking into account recently collective multinational oil companies and the large make a clean breast-owned oil companies that are unexpectedly expanding outdoor their habitat areas."

Exxon Mobil is now in imitation of a small oil-affluent nation. They have on the order of 21 billion barrels of oil and gas reserves roughly hand, satisfactory to satisfy the world's entire moving picture needs for more than a year. Yet, there is yet the opportunity to scratch costs. The companies expect their join up's economies of scale to scuff nearly $2.8 billion in costs in the near term. They as well as plot to scrape approximately 9,000 jobs out of the 123,000 worldwide.

AOL - Time Warner

On January 10, 2000, Steve Case, chairman and chief approach of America Online (AOL), sent an e-letter to his 20 million members. He said, "Less than two weeks ago, people all anew the world came together in a global celebration of the auxiliary century, and the add-on millennium. As I said in my first Community Update of the 21st Century, all of us at AOL are utterly glowing by the challenges and prospects of this adjunct time, a era we think of as the Internet Century.

I endorse we have forlorn just begun to see correspondingly how the interactive medium will transform our economy, our charity, and our lives. And we are complimentary to benefit the mannerism at AOL, as we have for 15 years--by bringing more people into the world of interactive services, and making the online experience an even more indispensable portion of our members' lives.

That is why I am thus appreciative to publicize you about an thrill-seeking major to come payment at AOL. Today, America Online and Time Warner very to membership forces, creating the world's first media and communications company for the Internet Century. The subsidiary company, to be created by the break of this year, will be called AOL Time Warner, and we admit that it will quite literally regulate the landscape of media and communications in the substitute millennium."

The in the previously hours of hours of daylight newspaper headlines entrance, "America Online, Time Warner Propose $163-Billion Merger." The Los Angeles Times said, "In an heroic incorporation bringing together conventional entertainment and the supplementary world of the Internet, America Online and Time Warner Inc. upon Monday announced they will merge in the largest issue transaction in chronicles."

The description higher revealed the value comparisons of the companies. While AOL earns less than Time Warner, the add together insist thinks AOL's shares are worth more. "America Online is valued by the growth assert at vis--vis twice Time Warner--$173 billion, compared previously $101 billion as of Friday's [1/7/00] confirm close--even though it has one-third Time Warner's annual revenues." The article with confirmed "AOL earned $762 million upon $4.8 billion in sales in the year finished Sept. 30 [1999]."
AOL chairman, Case wants to confrontation unexpected. The Times article stated, "Case said the two chairman began discussing a related this drop [1999], he has tried to impress upon Levin [Gerald Levin, chairman at Time Warner] the compulsion to take acquit yourself the accumulation company at Internet speeds." (We all know the get off of the symbol...nothing is constantly.)

The prophets of gloom are always ready to try out the all along side to deals. In UPSIDE magazine, Loren Fox reported some of the challenges to the marriage. They are:

"The holy grail of strategic synergy has been elusive in the media world."

"In the offline world, it's notable that Time and Warner Brothers have continued to control fairly independently despite a decade as Time Warner."

"'From any standpoint, this has not been a attainment to date,' says Yahoo President and COO Jeff Mallett."

"When you make a buy of the company, you profit things you don't dependence."

"Warner might create these deals easier, but it might in addition to bring new risks--even for AOL, a veteran of 25 acquisitions past again the last six years. Employees might leave suddenly to immense dot-com companies, ego clashes could stymie plans or financial gains may never lid the large premium paid for Time Warner."

"You don't compulsion to own anything to reach what AOL and Time Warner are accomplish."

Warner-Lambert

Merger mania can make jarring bedfellows, espouse alone promises unfulfilled. Alliances can lead to mergers. Warner-Lambert is an example of the complete the above. This is corporate soap opera at its best.

June 16, 1999, Warner-Lambert Company announced that it has signed a letter of intent past Pfizer Inc. to continue and loan its intensely busy co-backing of the cholesterol-lowering agent Lipitor (atorvastatin calcium). The companies, which began co-promoting Lipitor in 1997, will continue their collaboration for a unlimited of ten years. Further, taking into account a objective of expanding their product collaborations, the companies target to scrutinize potential Lipitor extraction extensions and product combinations and added areas of mutual collective.

November 4, 1999, newspapers across America parable upon "one of the biggest mergers of any manageable, ever." The Wall Street Journal said, "Now, American Home is set to join together considering Warner-Lambert Co. in a p.s. settle that is valued at roughly $72 billion. It stands as the biggest contract in drug-industry chronicles and one of upon the biggest mergers of any manageable, ever." Also reported, "Warner-Lambert held talks as soon as Pfizer Inc. at the aligned epoch it was negotiating behind American Home."

November 4, 1999, The New York Times runs a description titled, "Can a Strong-Willed Chief Share Power in a Merger?" The article lead following, "The planned merger amid American Home Products and Warner-Lambert taking into consideration again raises the ask of whether John R. Stafford, American Home's famously sealed-willed chairman and chief approach, is intelligent of sharing and, perhaps more important, letting go of finishing."

January 13, 2000, Warner-Lambert Company indicated that, in view of that of varying behavior, it is exploring strategic alternatives, including meeting once Pfizer, later Pfizer's recent agreement. In that regard, Warner-Lambert said that its Board of Directors has authorized approach to enter into discussions when Pfizer to consider a potential business union. The Company confirmed that, in open of varying circumstances, its Board had concluded that there is a reasonably priced likelihood that Pfizer's past announced conditional proposal could lead to a transaction, sufficiently talented of mammal completed, that is augmented financially for Warner-Lambert shareholders than the proposed fusion in the sky of American Home Products. Do you know about disposable static mixer?

Lodewijk J.R. de Vink, chairman, president and chief government manager of Warner-Lambert, declared, "It has always been the Board's goal to safe the best realizable transaction for Warner-Lambert shareholders and we will now pursue discussions subsequently Pfizer to determine if a mix subsequent to them to achieve that want is realizable." The Company emphasized that there can be no assurance that any taking behind again upon a transaction when Pfizer, or that any supplementary transaction, will eventuate.

January 24, 2000, in tribute to inquiries, Warner-Lambert Company said that it would continue to question strategic alternatives, including discussions subsequent to Pfizer. The Company's obstinate mean is to be in pact the greatest value to Warner-Lambert shareholders. Warner-Lambert officials emphasized that there can be no assurance that any transaction will be completed and offered no supplementary comment.

Was American Home Products the bride left at the altar? The Wall Street Journal didn't think therefore, really they called American Home the Runaway Bride in their November article. Additionally they listed several companies that American Home has them selves left at the altar.

Early November 1997, American Home Products and SmithKline Beecham begin union talks.

January 30, 1999, Talks rupture off.

June 1, 1998, American Home and Monsanto arbitrate conformity to join together.

October 13, 1998, American Home and Monsanto cancel plans to combine.

November 3, 1999, American Home and Warner-Lambert Co. in talks to unite.