MERGERS AND TAKEOVERS PROFESSIONAL ENGLISH IN USE FOR FINANCE

 

PROFESSIONAL ENGLISH IN USE FOR FINANCE 39. MERGERS AND TAKEOVERS

 

A Mergers, takeovers and joint ventures In this modern business world, the ownership of companies often changes. This can happen in different ways: ·         A merger: this is when two companies join together to form a new one (e.g. Exxon and Mobil, America Online and Time Warner) ·         A takeover or acquisition: this is when one company buys another one (e.g. Vodafone and Mannesmann, Daimler Benz and Chrysler). This can happen in two ways. Firstly, a company can offer to buy all the shareholders’ shares at a certain price (higher than the market price) during a limited period of time. This is called a takeover bid. Secondly, a company can buy as many shares as possible on the stock market, hoping to gain a majority. This is called a raid. B Hostile or friendly? There are two types of takeover bid. If a company’s board of directors agrees to a takeover, it is a friendly bid (and if the shareholders agree to sell, it becomes a friendly takeover). If the company does not want to be taken over, it is a hostile bid (and if successful), a hostile takeover. C Integration Horizontal integration is when a company gets bigger by acquiring competitors in the same field activity. Vertical integration is acquiring companies involved in other parts of the supply chain, usually to make cost savings.   EXERCISES 39.1 Complete the sentences. Look at A opposite to help you. 1 I want to work in the mergers and _______ department of an investment bank in New York. 2 Beverage Partners Worldwide is a _______ between the Coca-Cola and Nestle companies, making ready-to-drink teas and coffees. 39.2 Complete the sentences. Look at B opposite to help you. 1 Telecom Italia is looking for a _________ to rescue it from a _________ takeover by rival Olivetti 2 Colonial has agreed to a _________ takeover by Commonwealth Bank. 39.3 Match the newspaper headlines (1-5) with the processes (a-e). look at C opposite to help you.

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