6 Essential M&A Cases: Tata Group buys Jaguar Land Rover
The Tata acquisition of Jaguar Land Rover is a superb example to include in research notes on takeovers and mergers. At the time (early 2008), Tata’s investment in JLR seemed to be poorly timed and there were many critics who questioned the strategic logic of the move as well as its timing. Shortly after the takeover, demand in the global market for luxury cars collapsed as a result of the financial crisis and Tata was forced to refinance to support its investment.
Several years later, however, the takeover appears to be a compelling example of a successful acquisition which is generating substantial shareholder value for Tata as well as continued support from JLR’s many stakeholder groups in the UK.
read more...»Who owns who?
Sniper or Machine Gunner?
One of the major difficulties with the BUSS4 paper is managing time effectively. Students- understandably under pressure- regularly neglect to take the time to understand the question before they start writing. They are unsure how best to address the essay and so try to reproduce their text book, hoping that some of their knowledge will hit the target. Another error from those who have learned the syllabus, and/or built up a vast portfolio of information on the research theme, often feel obliged to ‘show off’ in the exam room. Rather than scoring highly, however, their essays tend to read like a list of bullet points, interspersed with ‘stories’ about businesses they have studied.
read more...»AQA BUSS4 - ‘with reference to *** plc and your own research ....’
As you have doubtless been told numerous times, success in BUSS4 depends on having carried out your own research - this year, with a particular focus on mergers and acquisitions. Did you realise you cannot get a good grade in the first part WITHOUT explicitly using your research in your response?
read more...»BUSS4 - Keep Calm and Carry On…
Preparing for the BUSS4 exam involves getting yourself right mentally. Many students underestimate the influence that attitude has in determining how well they perform. They focus on learning terminology and concepts and on building a research file but don’t spend enough time getting their psychological approach right. Here are some thoughts on how you can into the right frame of mind to do your best in BUSS4.
read more...»Takeovers and Mergers - A Casino Gamble?
Hot on the heels of the Vue takeover of Apollo Cinema Group, here is another significant takeover in the UK leisure sector. This one will certainly attract the attention of the competition regulators. Two of the UK’s largest operators of casinos are being brought together as Rank buys Gala Coral’s casino business for £205m.
read more...»Takeovers and Mergers - Vue on the Growth Trail!
News of a £20m takeover here which will be particularly relevant to colleagues and students who joined us recently for the BUSS4 revision workshops at cinemas around the UK…
read more...»BUSS4 - Mergers & Acquisitions - one that went wrong. BMW and Rover
When BMW met Rover
For the BUSS4 exam this June, it is useful to understand why a merger may fail to work and a retrospective look at BMW’s acquisition of Rover back in 1994 provides a good illustration of several possible pitfalls.
Takeovers and Mergers - the failed takeover behind Clinton Cards’ Collapse
The collapse of Clinton Cards has been widely predicted for some time as its new CEO (recruited from Starbucks UK) attempted to achieve a turnaround and restructuring in recent months. Clinton’s administration is one of the biggest UK retail failures wince Woolworths and much of the press analysis will focus on the competitive pressures that the retail chain faced from online operators like Moonpig and Funky Pigeon, as well as the effect of weak consumer confidence and spending.
Eagle-eyed A2 students, however, will also spot that a strategic mistake back in 2004 is at the root of many of Clinton Cards problems. The mistake - buying Birthdays Group in 2004.
read more...»AQA BUSS4 Section A Research Online Clinic - Tuesday 1 May 2012
This blog entry hosts an online revision clinic for students preparing for AQA BUSS4 Section A which will start at 9pm and last for an hour. Students who wish to get live support from the tutor2u team will be able to login to the clinic on this blog entry; please use your FB, Twitter or OpenID details to login.
read more...»Vodafone and Cable and Wireless Worldwide
Cable and Wireless Worldwide has 20,500km of fibre-optic cables in the UK, owning this would mean that Vodafone doesn’t have develop a network from scratch, estimated at £5bn. Vodafone like other mobile operators needs additional capacity to cope with the increased use of smartphones - downloads of music, video, photos etc.
read more...»Vodafone takes over Cable and Wireless Worldwide
Last week the share price of Cable and Wireless Worldwide C&WW, slumped, after the Indian conglomerate Tata withdrew its bid for the company.
read more...»6 Essential M&A Cases: BA & Iberia Merge to Form IAG
This M&A briefing note provides an overview of the merger of British Airways and Iberia which led to the formation of a new firm - International Airlines Group (“IAG”)
read more...»BUSS4: The Seven Point Scale for Perfect Paragraphs
This is an idea I’ve developed following the recent tutor2u BUSS4 revision workshops for marking and feeding back to students when building essay skills. Like many of my A2 Business-teaching counterparts, I spent a large proportion of the Easter break marking BUSS4 mock essays. In a bid to help my students develop their paragraph writing skills, I made a note of the common areas for improvement and summarised them into seven key points for writing the ‘perfect’ paragraph:
read more...»Easy ride for Audi?
Cross border acquisitions allow a firm to reach new markets, or to add to their portfolios of brands. This morning’s business stories included Audi’s announcement that it has taken over the Italian Ducati Compnay.
read more...»Takeovers and Mergers - Cost Synergies in Action at BMI
This is desperately bad news for the employees and local community involved, but it serves as a good example for students to understand the nature of cost synergies in a takeover or merger. This local newspaper report covers the announcement of hundreds of job losses at the headquarters of BMI, which has recently been acquired by British Airways from Lufthansa.
read more...»Takeovers and Mergers: Facebook & Instagram in News Clips
The Facebook takeover of Instagram for $1bn has generated a huge amount of media interest. The takeover is a great topical example for A2 business students looking at takeovers, and these video clips provide all they could possibly need in terms of looking at the motives for the deal and also the potential revenue synergies for Facebook.
read more...»Strategy & Technological Change - Whatever Happened to BlackBerry?
The revenues achieved in 2011 by RIM, the owner of BlackBerry, fell by 25% compared with 2010. It looks like customers have fallen out of love with BlackBerry. Apple, HTC, Samsung and other operator have grabbed a large share of BlackBerry’s customer base, so it must be that BlackBerry has seen its competitiveness deteriorate.
This excellent video from the FT examines some key strategic issues facing Rim and its BlackBerry brand. Could the business be a takeover target now that the firm is trying to achieve a turnaround? But, if so, who would want to buy it? Can new product development save BlackBerry before it loses further market share in key markets like the US? A fantastic lesson resource for A2 students…
read more...»Instagram - the business with no revenues, worth $1bn
Simply stunning. There’s no other way to describe the takeover by Facebook of Instagram…for a cool $1bn. This takeover has really made the technology market sit up and notice.
read more...»Revision Presentation - Emerging Markets
This revision presentation provides an overview of the topic of emerging markets. It highlights some examples of how businesses have pursued a growth strategy in emerging markets and also how developed economies have seen investment coming in the opposite direction. A brief overview of the methods and benefits/drawbacks of international expansion is also provided.
read more...»The Dawning Age of the Chinese Multinational
Chinese companies have historically been characterised as low-cost, low-quality producers of manufactured goods. However, there is growing evidence of a new breed of Chinese company emerging that is able to compete on the world stage.
read more...»Move over Apple, Samsung, Sony & Nokia. Here Comes China’s Huawei
A great article here for students researching the competitive environment in the consumer electronics industry. Students should certainly be familiar with the strategies of Apple, Samsung, Nokia, Sony and others. But have they heard of Huawei? It looks like they might soon, if Huawei is successful in its objective of grabbing a significant share of the smartphone and tablet markets.
read more...»BUSS4 M&A - the Benefits of Foreign Takeovers of UK Firms
Buried in this article about generating investment in Manchester are some gems of examples of why government might encourage foreign takeovers of British business. The article starts with an unlikely visit by Jim O’Neill of Goldman Sachs to the Manchester City stadium.
Famous for coining the term BRICS to describe the major emerging economies, O’Neill is equally famous as the leader of the Red Knights, who failed in their bid to buy Manchester United from the Glazer family in 2010 - the Glazer’s are accused by United supporters of failing to put enough cash into the club since they took it over. Sheikh Mansour, of Abu Dhabi, has poured money into Manchester City since he bought it in 2008 and there are ambitious plans to regenerate the whole area around the stadium.
read more...»Essay writing: turn evidence into analysis
At the recent A2 business studies revision workshops we focused on the need for students to use independent research evidence to help develop their essay points.
One analogy we used was thinking of examples (evidence) as the seasoning in an essay hot-pot or casserole. The seasoning is there to make the meal taste great; but you also need the raw ingredients! An essay point that is developed to a good depth will always score better with the examiners than answers which are littered with too many examples.
Let’s take a look at how we can use a recent business example to help develop a point.
read more...»IAG bid for BMI receives approval
International Airlines Group, IAG or BA/Iberia has secured EU approval for its purchase of BMI from Lufthansa. The purchase price is c. £172.5m. The quid quo pro is the insistence by the EU regulators that IAG gives up 14/56 of BMI’s slots at Heathrow.
read more...»Cosmetics gets hostile - the Coty bid for Avon
Coty’s £6bn bid for its close competitor Avon (which may soon go hostile if Avon doesn’t play ball) looks like it might turn into a ding-dong battle between the two firms. This would be ironic given that Avon is best-known for its ding-dong door bell commercials from the 1970s and 1980’s. There is lots in the press about the bid - this article from Reuters provides some useful background.. For an alternative take on the deal, you can;t beat the Guardian’s Kipper Wiiliams who sums it up nicely here.
The Coty bid looks a little opportunistic to me. Avon has been without a CEO for several months and their share price has drifted lower over a prolonged period. This might suggest that Coty sees both a strategic rationale to the takeover as well as a financial motive (buying a major competitor whilst its share price is unusually low). As always, the decision will be made by the shareholders who might want to see whether Avon can bring in a CEO capable of restoring their shareholder value.
Alternatively, the Avon Board may decide to recommend a higher offer from Coty. Interestingly, Coty has offered to review its offer (i.e. contemplate a higher price) if Avon allows Coty to begin a formal due diligence process. This looks a bit like a direct sales trick that Avon might appreciate - once you have a foot in the door, it’s much easier to close the sale!
Garden Centre Takeover - Can Hands Get the Growth?
Students researching AQA BUSS4 M&A for 2012 may well come across the private equity firm Terra Firma run by Guy Hands. They were the investors who got their fingers burned when investing £3bn in EMI, only to have to sell it for about half that price a few years later. Well. Terra Firma are back in the market - they have just completed the takeover of the Garden Centre Group, owners of brands like Wyevale and Blooms.
read more...»The Ultimate BUSS4 Takeovers and Mergers Crossword 2012
Looking for something a little different to help support teaching of BUSS4 M&A? Here is a 20 clue crossword that you could set as a homework or team research task. I’ve also provided a matching game activity using the same clues…
read more...»“Strategy is Choice” - Takeovers are Just One Option
In my previous life in mergers and acquisitions, I was fortunate to work alongside Dr John Wells (before he moved back to Harvard Business School) as we negotiated takeovers, investments, strategic partnerships and the like for a quoted travel company.
It was a chaotic period (right in the middle of the dot-com boom) and we probably had more misses than hits. However I always remember that period for a three-word phrase that became our mantra as we evaluated the best options for the Board.
The phrase was simply “strategy is choice”. Simple, and extremely powerful for students who need to write about external growth strategy.
read more...»Starbucks acquisition provides the base for entry into the juice bar market
A great example to use here which combines takeovers/mergers and also Ansoff’s Matrix. Starbucks has used a recent takeover as the platform for the launch of a new store concept which it hopes will generate sales and profit growth outside of the core coffee market.
read more...»
