Financial Markets and Economics - Assignment Example

Download file to see previous pages As of the staff of the Indonesian mine, a thorough evaluation of the existing resources should be conducted regarding all levels of the working area (from the management team to the worker).
b. The acquisition should create a competitive advantage for TCC mainly for the following reasons: 1. This mine should be the first offshore production base for TCC, a fact that could help towards the reduction of the company’s dependence on domestic mines, 2. The transport of the material from the specific mine is easier due to the absence of issues like the rail or port bottleneck, 3. Currently, the mine has a positive performance with a tendency for more growth (an export authorization for 20% more tonnage was granted this year), 4. The acquisition of the Indonesian mine could be achieved at a rather low price for TCC. As it has been noticed [2] ‘with the financial crisis that has been occurred since 1997, much of the Indonesian companies are in need of fresh investment and/or partnership in their business; this also results in the low value of the Indonesian companies, waiting for prospective buyers’.
c. The specific acquisition could lead to a few negative results for TCC. These could be summarized as follows: 1. The Indonesian market is a rather unstable market. This means that the chances for profit can be quickly replaced by significant losses, 2. The specific mine is only open cut and a possible expansion of its capacity is depended from the government’s relevant decision, 3. In any case, it will be necessary for the mine’s staff to be training in order to get familiar with TCC rules and targets and the use of its technologies, 4. The acquisition will create financial obligations for TCC which will have to be measured in advance calculating not only the cost of the acquisition but also of the operation of the acquired mine. ...Download file to see next pages Read More