Автор: Пользователь скрыл имя, 21 Марта 2011 в 20:11, реферат
The urgency of this work stems from the fact that in the poor economic situation that has developed to date in Russia, before the domestic companies more than ever is a problem of overcoming the crisis through the use of concrete and effective measures. There is need for effective search technology to overcome the crisis in the enterprise, the need to develop modern methods of restructuring ownership.
Introduction 3
1. The concept of mergers and acquisitions 4
2. Classification of mergers and acquisitions 5
3. Periods of mergers and acquisitions 7
4. Consequences of mergers and acquisitions 9
5. The merger of MTS and Sibchellendzh 12
Conclusion 14
References
MINISTRY OF EDUCATION AND SCIENCE OF RUSSIAN FEDERATION
The State University of Management
Institute of
Foreign Languages
Mergers & Acquisitions.
MTS and Sibchellendzh
Maktseva Anastacia
Institute of Management in Power Engineering,
Management in
international fuel and energy business 4-1
2011
The content
Introduction
1. The concept of mergers and acquisitions
2. Classification of mergers and acquisitions
3. Periods of mergers and
4. Consequences of mergers and acquisitions
5. The merger of
MTS and Sibchellendzh
Conclusion
References
Introduction
This work aims to study this
undeveloped issue as mergers and acquisitions. The theoretical aspects
of mergers and acquisitions, it’s basic classification.
The urgency of this work stems from the fact that in the poor economic
situation that has developed to date in Russia, before the domestic
companies more than ever is a problem of overcoming the crisis through
the use of concrete and effective measures. There is need for effective
search technology to overcome the crisis in the enterprise, the need
to develop modern methods of restructuring ownership. In this light,
activity in mergers and acquisitions as one of the main elements of
restructuring, its final link, aiming at changing the ownership structure,
deserves special consideration.
Merger - a union of two or
more business entities, which formed a new economic unit (the new entity).
The merger forms - the union, which merged companies cease to exist
as an independent legal entity and taxpayer. The new company takes control
and direct control over all assets and liabilities to the company's
customers - their constituents, then the last bloom.
The merger of assets - combined with the transfer of the owners of the
participating companies as a contribution to the authorized capital
of human control over their companies and conservation activities and
the organizational and legal form of the latter.
In foreign practice, stands another type of fusion, which in Russian
law falls under the term "accession" as a kind of reorganization
of legal entities. In this case, one of the merging companies to survive,
and the rest lose their independence and cease to exist. At the same
time surviving company receives all the rights and obligations of liquidated
companies.
Acquisitions - a transaction committed for the purpose of establishing
control over the business entity and carried out by acquiring more than
30% of capital (stocks, shares, etc.) absorbed by the company, while
maintaining the legal autonomy of the society.
Mergers and acquisitions can be classified as horizontal, vertical or conglomerate.
Most mergers and acquisitions are horizontal, some of them are conglomerate and fewer are vertical; out of these, horizontal mergers and acquisitions are potentially the most damaging to the competitive process, while the impact of vertical and conglomerate mergers on competition is more controversial, as they can bring about both harmful consequences and improvements upon competition.
Mergers and acquisitions may be typified as 'friendly' and 'hostile', as well, depending on the decision of the board of the target company. In a friendly merger or acquisition, the board of a target firm agrees to the transaction. However, a hostile merger or acquisition is undertaken despite the wish of the target firm and the board of the target company rejects the offer. The overwhelming number of mergers and acquisitions are friendly, while most hostile mergers and acquisitions occur in the industrial economies.
Mergers and acquisitions may also be characterized as either inward or outward. Inward mergers and acquisitions incur an inward capital movement through the sale of domestic firms to foreign investors, while outward mergers and acquisitions incur an outward capital movement through the purchase of all or parts of foreign firms. However, inward and outward mergers and acquisitions are closely related, since mergers and acquisitions transactions involve both sales and purchases.
Mergers and acquisitions have
their own characteristics in different countries or regions of
the world. For example, unlike the U.S. where there are, above all,
a merger or acquisition of large firms in Europe is the absorption of
small and medium-sized companies, family businesses, small-stock companies
of related industries.
The first peak of mergers took
place in the early nineteenth century. Then the consolidation have been
caused by changes in legislation and extremely unfavorable conditions
for business. First appearance of the company who have taken a number
of industries a monopoly position. To significantly affect market prices
by manipulating the production and supply, provided it is particularly
high profitability and to change the very essence of a market economy,
to this team based on the principles of free competition.
Historically, very interesting surge of mergers of companies engaged
in different types of business, ie, conglomerate mergers type. The boom
of large diversified companies, ie conglomerates, which occurred on 60
th of our century, though large conglomerates were created in the 20's. But
then, their creation was initiated by problems of militarization of
the economy, and in the 60 years as the formation of conglomerates occurred
on a purely commercial basis.
In the 70 years of active work
of the large companies for their continued diversification and it was
associated primarily with the desire to acquire assets in the fields
of electronics and telecommunications.
But in the 80 years of profit conglomerates have become increasingly
unsustainable. Companies that were part of conglomerates, showed worse
results than independent businesses in the same industries, and new
absorption only bring huge losses. According to estimates by Michael
Porter, in the first half of the 80-ies of absorption conglomerate of
companies in unrelated industries ended in failure in 74% of cases.
In the eighties the share of mergers such as conglomerate declined significantly.
Moreover, the creation of new corporations was accompanied by the destruction
of conglomerates, emerged 10-20 years ago. During this period, dominated
by the absorption of competitors by buying their shares, including a
very prominent among them were hostile takeovers. Given the softening
of the antimonopoly legislation intensified horizontal merger. Thus,
cases of horizontal mergers can be found, for example, in aviation:
Company Northwest in 1986, the firm absorbed the Republic.
We emphasize once again that a merger with the formation of conglomerates
are the least popular. However, among the companies whose shares are
currently traded on the New York Stock Exchange, forty companies officially
categorized as conglomerates. Their number includes such well-known
companies as "General Electric", the U.S. conglomerate "Textron
Inc" and "United Technologies Corp", British "Hanson",
Dutch "Philips Electronics", Italian "Montedison"
etc. But all of these conglomerates has refocused its activities on those
segments in which they lead. Currently, they acquire companies in key
business areas and sell all non-core assets.
In the nineties one of the
reasons for mergers was the desire to ensure stability in changing markets. In
the West, as a result of fierce competition and the uncertainty of the
environment has become a popular type of horizontal mergers. Thus, in
the steel industry, for example, due to excess supply has been reduced
the number of the industry. The same can be said about the companies
that provide services on Internet access. In this industry, the uncertainty
of the situation led to a merger of companies America Online and CompuServe. In
the 1997-98 boom in mergers embraced, especially financial institutions.
From the point of view of experts, the reasons for the burst of mergers
in 1998 related to the general processes of economic globalization,
the expected establishment of the European Economic and Monetary Union. However,
there are specific factors in each specific area of business. For
example, the growing number of mergers of companies that specialize
in financing activities have affected the growth of demand for these
firms, as well as the convergence of previously fundamentally different
market sectors, banking and insurance.
Mergers can increase the efficiency
of the combined companies, but they may affect the results of current
operations, to increase the burden of bureaucracy. Often very difficult
to estimate in advance how large may be changes due to mergers or acquisitions. But
the results of many studies to measure the net effect is produced by
mergers and acquisitions give very inconsistent and often totally contradictory,
conclusions.
According to the Mergers & Acquisitions Journal, 61% of all mergers
and acquisitions do not pay back investments in these funds. A study
of 300 mergers that have occurred over the past 10 years, conducted
by Price Waterhouse, showed that 57% of the companies formed as a result
of a merger or acquisition, lag behind in terms of its development from
other similar representatives of the market and are forced to once again
split into independent corporate units.
Experts are usually specified three reasons for failure of mergers and
acquisitions:
• Incorrect assessment of the absorbing company attractiveness of
the market or the competitive position of the absorbed (target) company;
• underestimation of the size of investment needed to implement a
merger or acquisition;
• errors made in the implementation of the merger.
Absorbing the company sometimes
misinterpret the assets of interest to their companies or their obligations. For
example, to underestimate the costs associated with the modernization
of equipment in this company, or its obligations under the warranty
of defective products. Significantly can affect the efficiency of merger
obligations of the absorbed company to protect the environment. If the
operations of this company lead to contamination of the environment,
all costs in this case is likely to be imposed on the shoulders of the
absorbing company.
Very often underestimated the necessary investments to implement a merger
or acquisition. Errors in the valuation of future deals can be very impressive. For
example, the absorption of BMW Rover Company the estimated cost of the
last was 800 million pounds, as required in the next five years after
the merger of investment - 3.5 billion
Many mergers that seem economically feasible, have failed because of
mistakes made in the implementation process.
Sometimes managers are not able to cope with difficulties arising from
integrating the two companies with different characteristics of the
production process, accounting, corporate culture.
The value of many companies
is directly dependent on specific assets such as human resources - professional
managers, qualified workers, engineers and researchers. Change the host
leads to a revision of existing criteria for personnel evaluation and
career planning traditions, to change the priorities of spending, a
change in the relative importance of individual management functions
and, hence, breaking the informal structure. In addition, if managers
are absorbed by the company have a share in its capital, its instantaneous
transformation of the owners of employees affects the motivation, and
as a result they begin to work less. If these professionals will not
feel satisfied with their position in the new company formed after the
merger, the best of them go out of it.
Analytical studies of mergers, show interesting results: it appears
more profitable to sell the company than to buy someone else's. In most
cases, shareholders of companies that were the sellers in mergers or
acquisitions, received a very substantial benefits, and the shareholders
of the absorbing company benefited much less. This can be explained by
two reasons:
First, the absorbing company, as a rule, always larger than absorbed. In
this case, the uniform distribution of the net benefits of a merger
or acquisition between two companies, shareholders of each company will
receive the same profit in absolute terms but in relative or percentage,
the expression returns to shareholders of the absorbed company will
be much higher.
Secondly, significantly contributes
to this process, competition between buyers. Each next contender to buy
the company strives to surpass the conditions put forward earlier. In
this case, all the most benefit from the upcoming mergers goes to the
shareholders of the absorbed company. At the same time, managers of the
company, which is going to absorb, can take some measures protivozahvatnogo
nature, seeking to sell their company, if it occurs, has occurred at
the highest possible price under these conditions.
In large corporations formed in a merger or acquisition often occurs
phenomenon known in economics suboptimization. Its essence is as follows:
within corporations usually dominated by the desire to strengthen intra-group
cooperation relations, mainly to fly in "their". In addition,
each "own" the company is naturally inclined to set a price
that brings the maximum profit. As a result, any products at the outlet
becomes too expensive and uncompetitive, or normal commercial negotiations
on the price level are transformed into endless debriefings Claims. The
more complex the system of cooperative relationships within the corporation,
the more difficult to build and debug the system of transfer prices
that satisfy the firm at different ends of the Cooperation of the chain.
OAO Mobile TeleSystems signed
an agreement to acquire 100% stake in Sibchellendzh, a cellular operator
in the Krasnoyarsk region of Russia.
In accordance with the strategy of MTS to expand the geography of business
in the most attractive regions of Russia, the company signed an agreement
to acquire 100% of the company Sibchellendzh, a cellular operator in
Krasnoyarsk, for $ 45.4 million
"Sibchellendzh is the holder of a license to provide mobile services
in GSM 900/1800 standard and DAMPS in the Krasnoyarsk Territory. Population
of the region is about 3 million people. Mobile penetration in the region
on 30 June 2003 is estimated at 11% of the total population. Earlier
in the MTS was not licensed to provide cellular services in the region.
Subscriber base Sibchellendzh "is about 130 000 users (GSM - 123
000, DAMPS - 7000). According to the information-analytical agency market
share "Sibchellendzh" in the region on 30 June 2003 is 40%.
"The acquisition of Sibchellendzh"
MTS provides a unique opportunity to develop their activities in one
of the key regions of Siberia. We are acquiring a company in the industrial
area where there is potential for growth. This is another step to strengthen
our position in the Siberian Federal District, in many regions where
we already operate, "- said Mikhail Smirnov, President of MTS.
Krasnoyarsk Territory will be 59-m region of Russia where the company
owns the GSM-license. The acquisition of Sibchellendzh will increase
the population of the licensed area of MTS to 172.2 million (of
which 113.2 million live in Russia, 49 million - in Ukraine, and 10
million - in Belarus).
After spending a transaction acquirer (MTS) has acquired the following
assets Sibchellendzha:
• Sibchellendzha subscriber base - about 130 thousand users, or 40%
of the Siberian region.
• 106 base stations and 2 switching center - a network that covers
the main points of Krasnoyarsk Territory: Krasnoyarsk, Norilsk, Achinsk,
Minusinsk and Dudinka.
• The average monthly service revenue per subscriber for 1 - $ 21
for 2002.
• License to provide mobile services in the Krasnoyarsk territory,
the republic of Khakassia and the Taimyr Autonomous District. Earlier
in the MTS was not licensed to provide services in the region.
Conclusion
In a globalizing and liberalizing world with rapid technical change, mergers and acquisitions constitute an essential part of the process of restructuring that undertakings and economies are undergoing all over the world.
Mergers and acquisitions can
play a role in revitalizing ailing firms and local economies through
restructuring process, acquisition of technology and productivity growth.
To this end, in periods of crisis or transition, for example, mergers
and acquisitions may be the only way to inject foreign resources and
enable economies to adjust to new circumstances. The fact that acquired
firms provide an element of inertia may be an advantage to the host
economy in that, existing linkages, skills and business practices can
be preserved to the extent that they are efficient. Yet, countries have
differed widely in their openness to foreign direct investment, including
cross-border mergers and acquisitions, and in the benefits they have
realized from the ongoing globalization of industry. Government policies
and corporate culture caused some countries to be largely closed to
foreign acquisitions until recently. The ongoing liberalization of foreign
investment regimes indicates that a broader range of countries could
realize benefits from mergers and acquisitions.
References
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