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Strategic Management Unit 5 DB week two - Essay Example

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An acquisition refers to a corporate transaction in which one company purchases another’s possession of legal stakes, either fully or on a partial basis of ownership hence controlling it. Acquisitions can occur for various reasons, chief among them the desire to multiply…
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Strategic Management Unit 5 DB week two
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Successful and Unsuccessful Acquisition al Affiliation) An acquisition refers to a corporate transaction in whichone company purchases another’s possession of legal stakes, either fully or on a partial basis of ownership hence controlling it. Acquisitions can occur for various reasons, chief among them the desire to multiply extent of shares in the market and hence acquire an added advantage in a competitive domain. The focal point of this paper is to illustrate mergers (one of each) that were successful and those that achieved the contrary
July 11th 2008 saw InBev acquire Anheuser Busch following a $52 billion offer. This made InBev, which is originally Brazilian, the largest beer maker. In 2007 the new company boasted $36.4 billion in net sales. The company became in charge of 300 independent brands once the two had sealed the deal. Although the company was bought out, Anheuser Busch was well involved in the new management as its director and CEO were given positions in management, which business wise was sure to give it longevity. The acquisition was majorly successful owing solely to the fact that InBev did their research into the weaknesses their target company had, painted a clear picture of how they could be faced with so many hurdles in the case that they turned out to be long term and this could result in bankruptcy (Ross, Westerfield, & Jordan 2006).
$580 million is the stunning price that News Corp put on the table in its desire to purchase MySpace. The purchase proved to be fruitful up until 2008 when Facebook completely took over the networking world as the leading social site completely displacing MySpace (Ulijn 2010). The downward trend continued until the company sold MySpace off to Specific Media at $35 million, which was as good a deal as they would get. This acquisition failed solely because NewsCorp was a little rush in its purchase and did not fully consider the possibility of harsh competition and as such had little to no preparation for the worst.
All things said with acquisitions, just like in business risks occur and success can only come about if preparation is in depth.
REFERENCES
Ulijn, J (2010). Strategic alliances, Mergers and acquisitions: the influence of culture on successful cooperation, Cheltenham: Elgar
Ross, S., Westfield, R., Jordan, B., (2006). Fundamentals of corporate finance, Boston: McGraw Hill. Read More
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